IMPORTANCE AND BENEFITS OF FILING INCOME TAX RETURNS

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Who Is A Responsible Citizen?

The answer includes hundreds and thousands of points which define a responsible citizen. People contribute to their nations in many ways; some help their nation by making sure its environment is safe, while some contribute by working to eradicate social evils. Another most highlighted trait of a responsible citizen is their direct economic contribution to the nation. Yes, we are talking about Income Tax Filing.What Is Income Tax Return Filing?

In India, When a person/entity earns a certain amount of income in a year, the Income Tax Act of 1961 obligates them to pay a certain amount as a tax and inform the government about it.

For example, Shivi has earned ‘X’ amount in the previous year, so this year she will compute her Net total income, on which she would pay the tax. Suppose the ‘Y’ amount came out as a net tax liability, which she would pay to the income tax department. Things don’t end here; after paying Net tax liability, she is obligated to inform the income tax department about the same, known as Income Tax Filing or Return filing.

In India, there are broadly Seven unique formats made by the income tax department for different categories of payers. These are, ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7. There is a specific due date for different categories of payers in the year. For example, Those individuals whose Gross total Income maximizes from the specific basic exemption limit must fill their required ITR before 31st July of every year.

Although there are various provisions for different kinds of payers, one thing is clear; everyone benefits from filing the returns, whether it’s compulsory for them or not.

Importance And Benefits Of Filing ITR

One should always file their Income Tax Returns, whether it’s compulsory for them. Let’s see why!

For getting credit/ loans from banks or any other financial institution: This upcoming generation is the generation of Entrepreneurs; Government throughout the world also encourages youths to become entrepreneurs and run businesses they can excel at. This surely helps individuals and Nations to grow. But starting up a business initially needs a huge amount of capital, which a large portion of the population cannot afford collectively; for this, they require loans.

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