Whenever we hear the word income tax, we get nervous of course a part of our money will go to government account, right. Let’s being honest here – no one wants to pay income tax. There are lots of individual who think that filing tax returns is voluntary. Therefore dropping the idea of filing thinking it as irrelevant and cumbersome. Honestly, this is not at all a healthy perspective on tax-filing. Let me tell you that tax-filing is important for individuals who exceed the annual amount and need to pay tax on that income. Undoubtedly, filing income tax return is considered moral and social duty of every responsible citizens of the country.
Still thinking why you need to file an income tax return? In this article, I am going to highlight some reasons that will help you know the relevancy of filing income tax return. Let’s jump into the pool below.
Some significant reasons highlighting the need to file an income tax return
* A sign of being a responsible citizen
Irrespective of the country you live in, it is mandatory for you to pay a certain amount as tax if your annual amount is more than the specified amount set by government. If you don’t pay tax, Income Tax Department will penalize you. In fact, people who earn less than the prescribed level of income can file returns voluntarily for the betterment of the society. Therefore, filing tax shows a sign that you’re a responsible citizen of the country. In addition, it makes easier for businesses and individual to enter into transactions since their income is recorded by tax department.
* Helps in availing loan or applying for credit card
Whenever you apply for loan or credit card, first thing bank will check is how loyal, fair, or responsible you’re with income tax if you earn more than specified amount. This is important when it comes to finance and maintaining accounting records. So if you honestly pay income tax it shows a proof that you have paid appropriate tax. Moreover, financial institutes would also ask to see your Tax returns. No doubt, filing income tax return on time helps you improve your creditworthiness for future loans.
* You can easily adjust capital gains and losses
Another reason to file income tax return is that you find easier to adjust capital gains and losses if you invest in equities. And as per income tax law, if you face capital losses then you can adjust it against capital gains. But to do that, it is mandatory that you file tax return. Not only filing tax is mandatory but also it helps you in many parts of your business and one such is adjusting capital losses.
* Helps in visa processing also
How many times your visa got cancelled due to income tax return? If you’re regular with your IT return filing, you can easily get your Visa processing done for international trip. You should know that if you’re going to abroad and applying for Visa, the foreign consulate would ask you a proof of your income. You may be asked for income tax receipts for a certain period. Let me tell you that if you plan to go to countries like USA, Canada, or Europe, IT return is mandatory.
* Easy to claim for tax deductions
Whichever country you live in, if you pay tax return before or by the due date, it will be beneficial and easier for you to claim multiple deductions under various sections of income tax act. Therefore, in future, you will not have to pay the full amount of tax rather less amount after applying for deduction. So you can see filing tax return also provides you facility to save your money from going to tax.
Note: Curvearro works as a marketing and digital partner for Kayabooks and provides them digital marketing services.
Filing income tax return is very important for every individual whose earning exceeds the specified amount defined by government. Not only it shows that you’re a responsible citizen of particular country, but also helps you in many ways which I have discussed above. Make sure you also file for income tax if you’re eligible. And not filing will impose penalty upon you by the Income Tax Department. Now choice is yours!
Have any query related to this article or finance? Just get in touch with us here.