- Date : 21/07/2022
- Read: 3 mins
Filing income tax if you are not eligible to pay any income tax.
Do you earn less than Rs 2.5 Lakhs per year? The deadline to file income tax is July 31. Are you relaxed that you do not need to file income tax? In certain circumstances, you might have to file income tax even if you are not in the income tax bracket.
The certain conditions are: -
- If you have deposited more than Rs 1 crore in a current account of any bank, you need to necessarily file your income tax.
- If you have spent Rs 2 Lakhs or more on foreign travel.
- If you have spent Rs 1 Lakh or more on electricity bill
If you do not fall in the income tax bracket and do not meet any of the three conditions above, you are eligible to avoid filing income tax. But we still recommend that you file your income tax. There are many benefits of filing ITR, even if you are below the basic exemption limit.
Benefits of filing ITR
- Loans- If you want to apply for loans, your bank will probably ask for your ITR statement and Form 26AS to demonstrate your TDS.
- Tax Refunds- It is possible that your tax was deducted at the source, and your income is below the basic exemption limit. In such a case, you are eligible for a tax refund. But to get the tax refund, you need to file the income tax.
- Carry losses forward- In the current financial year, you may have suffered capital gains or business losses. You should know that you can carry your losses to the next financial year. This will reduce your tax liability in the next year. Thus you should file your ITR to get tax benefits in the next financial year. Know more about Tax Planning.
- Visa processing- If you travel abroad, you must apply for a visa. The visa authorities will ask for your ITR statement to check your financial standing. Thus even if you are below the basic exemption limit, you can file the ITR and show it to the visa processing authorities.
- Life insurance of higher cover- Insurance companies do not allow you to purchase a higher life insurance without an ITR statement. If you have an ITR statement, you can apply for a higher life insurance cover.
Thus, you need not file income tax if your income is below the basic exemption limit. But the benefits of filing ITR are many; therefore, you should file the income tax even if you are exempt. This will ensure that your financial standing is respected by various companies, banks and visa processing authorities. So the deadline to file income tax is 31 July. File your income tax before that. Know the tax benefits available if your income is below Rs 5laks.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.