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Do you ever struggle with filing income tax returns? Or often forget it and have to pay an unreasonable high penalty? If these are your problems then you are at the right place. Read further to know more.

Income tax is a sort of tax levied by the central government on the income produced by individuals and corporations during a fiscal year. The government generates revenue through taxes.

This revenue is used by the government to fund infrastructure development, healthcare, education, farmer/agriculture subsidies, and other government welfare programs. Taxes are classified into two types: direct taxes and indirect taxes.

Direct tax is levied directly on earned income. Income tax is a type of direct tax.
Direct Taxes are broadly classified as:
Income tax is the tax that an individual, HUF, or any taxpayer other than a corporation pays on their earnings. The legislation specifies the rate at which such income is taxed.

Corporate Tax - This is the tax that corporations pay on their company profits. Again, the income tax filing rules of India have set a certain rate of tax for corporations.
However, even if you make less than the taxable limit, there are still other advantages to efiling of income tax. We'll take a look at a few of them here:
Effortless Loan Approval
E-filing of income tax will assist persons when applying for a vehicle loan (2-wheeler or 4-wheeler), a house loan, and so on. All big banks might request a copy of your tax returns as proof of income. ITR is a required document for loan approval.

Seek a Tax Refund
There may be times when tax is deducted (TDS) from your earnings even though your total taxable income is less than the basic exemption limit and you have no tax due for the year. In such a circumstance, you will have to seek a TDS refund, for which you must file an Income Tax Return.

Proof of Income and Address
The Income Tax Return is a document that can be used to show your income and address.

Visas are processed quickly.
At the time of visa application, most embassies and consulates require you to provide copies of your tax returns for the previous two years. These are among the legally required documents, so it is always advised to file your ITR on time.

Carry Your Losses Forward
If you file the return by the original due date, you will be eligible to carry over losses to the following years, which you can use to offset future income. This implies you can deduct some losses from relevant income, which will help you decrease your future income tax bill.

Avoid the Penalty
If you were obligated to file your tax returns in accordance with the Income Tax Act but did not, the tax office has the authority to levy a penalty of up to Rs. 5,000.

Benefits of filing an ITR if you are not in the tax bracket
In addition, if one's yearly earnings fall below the taxable slabs, he or she might file a NIL income tax return. Filing NIL income tax returns has various advantages. Some of them are as follows:

The ITR receipt acts as a verification of address.

Filing NIL income tax returns will make it easier to apply for credit cards.

In some situations, the income tax return receipt can also be used as proof of income.

Consequences of Failure to File an ITR
Now that you've learned about the benefits of submitting an income tax return, here are some of the consequences one may face if they will not:

If a person falls into the taxable bracket, he or she will receive an income tax notification.

If an individual is unable to file IT returns for legitimate reasons, the authorizing body will accept a thorough letter and supporting evidence. In such a circumstance, he may seek condonation relief.

Individuals will be fined if they fail to file their ITRs on time. In general, if one's salary exceeds 5 lakhs, he must pay a penalty of 10,000. If your income is less than this amount, the fine is $1,000.

Taxpayers might face harsh punishment in serious cases such as tax evasion.

However, some people are exempt from having to file an income tax return. According to the Finance Minister's declaration in the Union Budget 2021, senior individuals above the age of 75 will be excluded from filing ITRs entirely.

By reading this complete information on the benefits of submitting ITR, one can recognize the benefits of e-filed tax returns and apply for them without delay.

Wrapping Up
However, some people are exempt from having to file an income tax return. According to the Finance Minister's declaration in the Union Budget 2021, senior individuals above the age of 75 will be excluded from filing ITRs entirely. 1 (Source)

By reading this complete information on the benefits of submitting ITR, one can recognize the benefits of e-filed tax returns and apply for them without delay.

Easifyy is a one-stop destination to assist you with income tax filing and the completion of legal documents. So why wait, we have expert consultants and provide refund protection.