Not filing ITR due to non-taxable salary? Here's why filing income tax returns is important

New Delhi: In India, many people shy away from filing income tax returns, especially those whose salaries fall in the non-taxable category. While filing ITR won’t give them any monetary returns, they can still enjoy several other benefits that come with submitting income tax returns on time. 

For the financial year 2020-21, the last date to file an income tax return (ITR) is December 31. Taxpayers and salaried individuals are required to file income tax returns for the income earned between April 1, 2020, and March 31, 2021, till December 31. 

Benefits of filing tax returns even if your salary is non-taxable

Filing ITR on time comes with several benefits. For starters, the ITR filing can be used as income proof required to apply for loans. Archit Gupta, Founder and CEO, Clear said, "Keeping proof of your income levels and current financial status will help you apply for loans such as auto loans, personal loans, housing loans, etc., and VISA.” 

Gupta added that even though your income level is below the basic exemption limit, regular ITR filing will help you fasten your loan application processing without difficulties. 

“Bankers generally demand for the last three years income proof. You may not be able to provide all the year’s returns if the deadline of filing the ITR of that particular year is missed,” he explained.  

To carry forward losses incurred on the sale of capital assets or business or profession, you need to file ITR within the due dates, and you can set off such losses with the profits earned in the subsequent years, Gupta added.

Also, Indian residents who own assets or investments outside the country are required to file ITR for every financial year even though their salary falls in the non-taxable category. Also Read: Fake Paytm App Alert! Check how to identify fraud or you could lose money

“Moreover, you need to file ITR to claim the refund of excess tax deducted from incomes like fixed deposits, recurring deposits, etc,” Gupta added. Also Read: Bank holidays in January 2022: Banks will remain closed for 16 days; check important dates

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