There is no harm in filing ITR even income is below the Basic Exemption limit. Filing ITR will help you in maintaining the record of your annual income.

1. It helps in buying Insurance (Term, Medical etc.):

Insurance Companies need 3 years of ITR copy before giving any Term Loan or any Insurance. You will als need ITR for 3 years for any type of vehicle insurance. So if you filed the ITR then it can be beneficial to you.

2. It is an Income Proof:

For Small businessmen & low salaried class people, ITR is the only document of Income Proof. ITR is the most imporatnt document for your income proof.

3. It helps in Hassle-free visa application procedure:

At times visa authorities ask for copies of past tax returns, hence to apply for a visa a tax return would be required to be filed.

4. It helps in getting TDS Refund on Investments:

If TDS is deducted on your income which is below the basic exemption limit, the only way to get back the TDS amount is to file the Return & Claim it as a refund.

5. It helps in Compensating losses in the next financial year:

If you file ITR then you can Carry forward your loss in the next financial year & compensate the loss with your future income. With this, you can reduce your future tax liability.

6. Avoid penalties or notice from the tax department:

From the Financial year, 2017-18 Rs 5,000 to 10,000 would be levied for non-filing of ITR. You may receive notice from the tax department for non-filing of Income-tax return. To avoid penalties or notice from the tax department, you must file your Income-tax return.

7. Carry forward of Losses:

If you have capital losses & your income is below basic exemption limit, then if you file the ITR then only you can carry forward the losses to the next financial year & adjust the losses in next years’s income.

This article is written only for knowledge sharing. If you need further information then you can mail us at [email protected] or you can message us in whats app at 8879882025.

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Qualification: CA in Job / Business
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Location: Kalyan, Maharashtra, IN
Member Since: 07 May 2020 | Total Posts: 19
I am a Chartered Accountant. You can reach out to me on 8879882025. View Full Profile

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February 2021