Hassle-Free Loan Accessibility: File ITR Even with Annual Income Below 2.5 Lakhs, Discover Its 5 Benefits

For the financial year 2023-24, the deadline to file income tax returns (ITR) is set for July 31. Many individuals believe that if their annual income is less than Rs 2.5 lakh and they are not liable to pay taxes, they don’t need to file ITR. However, this assumption is not entirely accurate.

5 Benefits of Filing Income Tax Returns (ITR) Even if You Don’t Owe Tax

Even if your income doesn’t fall under the tax net, filing Income Tax Returns (ITR) holds numerous advantages. Here are five reasons why filing ITR is essential:

1. Ease of Loan Approval: ITR serves as proof of your income. Banks and NBFCs accept it as evidence of income. When applying for a bank loan, lenders often request ITR documents. Regularly filing ITR makes it easier to obtain loans and other financial services from banks and financial institutions.
2. Necessity for Visa Applications: If you plan to travel to other countries, you’ll likely need to apply for a visa. Many countries require visa applicants to submit ITR documents for the past 3 to 5 years. Immigration authorities use ITR to assess the financial status of applicants.
3. Claiming Tax Refunds: If you’ve paid excess tax or are eligible for tax deductions, filing ITR allows you to claim tax refunds. Without filing ITR, you cannot receive any refunds, even if tax has been deducted at source.
4. ITR Receipt as Address Proof: ITR receipt can serve as proof of address for various purposes, including service verifications requiring address proof.
5. Carrying Forward Losses: If you’ve incurred losses from investments in shares or mutual funds, filing ITR within the specified time allows you to carry forward those losses to the next financial year. This is crucial because if you make profits in the future, these losses can be adjusted against them, reducing your tax liability and potentially providing tax benefits.

Filing ITR, even when not mandated by taxable income, can thus lead to various financial advantages and ensure compliance with regulatory requirements.