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Why you should file Income Tax Return?
Irrespective of the basic exemption limit, if during the year, you –
- a) Paid Electricity Bill more than 50,000/- during the year; or
- b) owning a residential house exceeding the specified floor area; or
- c) are owning a motor vehicle (other than two-wheeler); or
- d) have travelled to any foreign country; or
- e) hold a Credit card issued by any bank or institution or
- f) are member of a club where entrance fees is more than 25,000/-
you are mandated to file an Income Tax Return, even though you may not have any taxable income. – Proviso to Section 139(1).
It is mandatory to file your Income Tax Return, if you have any Foreign Assets, even though you may not have any taxable income.
If you have a refund due, you need to file your Income Tax Return, to claim this refund.
Income Tax Return is essential for making any investment and goes to prove that you have a valid source of income to make such investment.
When you file Income Tax Return, you create your Financial Record with Tax department. This financial / tax history is positively viewed and favourably used by most agencies with whom you may need to interact, such as when you avail any kind of loan (home, personal, vehicle loan) or when you apply for VISA, etc.
Failure to file Income Tax Return within one year from the end of the relevant financial year, attracts penalty of Rs.5,000/-, even though tax payable is Nil- Section 271F .