But the real question is that if your income is not taxable, that is, there is no tax deducted on your income or even if no refund is made, should you file an income tax return or not?
Actually yes, if you are filing tax return on your annual income, even if no tax cut is made or refund is not available, you get many benefits. Your ITR can bring you many benefits in many cases, while on many occasions it can serve as important document.
What are the benefits of filing ITR?
Fines do not have to be paid
First of all, you do not have to pay the prescribed penalty for not filling ITR or for delayed payment. Your record is clean in the Income Tax Department. At the same time, you are also saved from the mess of legal issues. Under Section 234F of the Income Tax Act, if your annual income is less than 5 lakhs, then you have to pay a fine of 10,000 on income of 1,000 and more. In such a situation, it is your duty to file your tax return.
Will be saved from extra interest
In the event of not filing ITR, the interest on the returns made on you in any situation keeps increasing by 1 percent per month, in such a case that if you do not file ITR, then the amount of interest will increase.
If you want to claim a refund
If TDS (tax deducted at source) is deducted in any of your investments, then you have to fill the ITR to claim the refund. That is, if you want a refund, then fill the ITR.
Help in credit and loan processing
The receipt of ITR comes in handy on such occasions. If you want to apply for a personal loan sometime in the future, it can help. Banks and financial companies give preference to ITR receipt in deciding your credit. In such a situation, if you have been filing your return, then you will not have to face difficulties in taking a loan.
No loss of credit card and insurance cover
The banking institution can reject your credit card application in the event of ITR not being filed. At the same time, if you want to buy a more covered insurance policy, then having an ITR submission for this can be helpful. If you do not have any such proof, then your insurance company may refuse to give you a high-cover policy.