1. Easy Visa Processing
ITR receipt plays a vital role in processing visa application. Most embassies & consultants ask you to furnish copies of your income tax receipts for some past years at the time of visa application, as ITR receipt acts as proof of an applicant’s income, the embassy will check the income details and ensure he/she is capable of taking care of travel expenses. These are amongst mandatorily required documents and hence it is always advisable to timely file your ITR.
2. Carry Forward Your Losses or Loss Compensation
If you have incurred any losses from business during a specific fiscal year. You can carry forward these losses to subsequent years, which can be further used to set off against the income of subsequent years. It means you can deduct such losses from the subsequent year income which will help you reduce your tax liability of the future income. This is possible only if you file your ITR before due date.
3. Easy Loan Processing
Majority of Financial institutions require ITR Receipt for previous year or years for loan application as a proof of their income. ITR Receipt is a mandatory document for Loan approval. Therefore, it is essential to file for ITR if a person plans on securing a home or a vehicle loan, etc.
4. Claiming Tax Refund
There are some instances when TDS has been deducted from your income even when your total taxable income is less than the basic exemption limit and you have nil tax liability for that year or when you fall under lower tax bracket but TDS is deducted at a higher rate than your tax bracket. In such cases, if you want to claim your tax refund from Income Tax Department then you have to file ITR mandatorily.
5. Serves as Income Proof
ITR receipt can also be used as Income Proof in some cases.