- By Aditya Pratap Singh
- Tue, 18 Mar 2025 01:49 PM (IST)
- Source:JND
Income Tax Return: Many people think that they should file an income tax return (ITR) only if their income exceeds the taxable limit. However, even if your income is below this limit, filing an ITR can still be very helpful. An ITR is an important financial document that is more than just a tax requirement; it can help you with financial planning, investments, and loan and visa applications, among others.
Irrespective of the income level, experts strongly advise everyone to file their ITR by the July 31 deadline. Below are the top reasons, why you should file income tax return (ITR).
Requesting a tax refund
By filing an ITR, you can get your money back if tax deducted at source (TDS) has been withheld from your income, whether it came from commission, salary, interest or professional fees. Sometimes too much has been deducted, and filing a tax return is the only way to get your money back. If you don’t file, your hard-earned money will remain with the government.
Carrying forward financial losses
If you have experienced losses on investments in stocks, real estate or businesses, you can carry forward and deduct the losses from future profits, but only if you file an ITR. If you don’t file, these losses cannot be deducted from future profits, which will increase your tax liability later when you make money. This is especially helpful for losses associated with capital assets and real estate.
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Increased financial credibility
Whether you are starting a business, buying real estate or making a major investment, filing an ITR improves your financial credibility. It makes transactions with banks and other financial institutions easier and improves your credit history.
Easier loan approval
Banks and other financial institutions ask for proof of income when applying for loans, be it a personal loan, auto loan or home loan. Since your ITR is a reliable source of income, it is easier to get loans at lower interest rates. Due to a lack of financial credibility, banks may be reluctant to lend at higher rates if you don’t have an ITR.
Easy visa process
Are you planning to travel abroad? ITRs from the past few years are often required as proof of financial stability when applying for visas in many countries, including the U.S., Canada, Europe and Australia. Submitting your ITR can increase your chances of getting your visa approved, speeding up and simplifying the application process.
