Should we file ITR even when our income is below the exemption limit?

Some individuals are exempted to file an income tax return by law, they should file. Here is why so.

As the date of filing ITR is coming closer some individuals have a question.

Should we file ITR even when our income is below the exemption limit?

A one-word answer to this will be YES you should. I have explained below why you should file your ITR even when your income is less than the exemption limit!

See there are certain benefits you can avail by filing an income tax return, doesn't matter your income is more than the exemption limit or less than.

Benefits of filing ITR

• Claiming refund

• Applying for loan

• Carry forward of losses

• Establishing income proof

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Claiming refund

Many people invest their saving in different schemes provided by financial institutions, banks etc. While receiving salary, payments and return on investment, TDS (Tax deducted at source) is deducted. If your total income is less than the exemption limit then you can claim to refund the number of TDS deducted but for claiming that amount you have to file your income tax return. Without filing ITR you can't claim your TDS amount.

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Applying for loan

Sometimes for fulfilling our needs, we need funds. For this we apply for loans, the eligibility of getting a loan depends on one's income and ITR is a government authorized document that provides a detailed picture of our income, it is accepted by Basically all the agencies for easy processing of loans and visa. Without an ITR it may be difficult to take loans from any agencies.

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Carry forward of losses

Sometimes there are possibilities to incur losses, in this case, you can't stay away from filling your ITR saying that your income is less than the exemption limit set by the government. By filing the ITR for that relevant assessment year you can carry forward your losses to set it off against your income of the subsequent year. There is a rule in the income tax act that you can carry forward your losses of the assessment year of which you have filed an ITR, otherwise, you can't do that without filling an ITR.

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Establishing income proof

Last but not least. Filing ITR helps you in establishing your income proof, it is the most important and worldwide accepted document for proof of your income. It is helpful in various places like, while going for admission of your child some schools give scholarships to children who belong to an economically backward family but how will you prove it, at this time ITR plays an important role, it acts as an income proof. Not only in schools but other places like while joining a company they may ask you for your ITR to verify your salary in the previous company. While getting married also, nowadays they ask for your ITR to satisfy themselves about the income that you declared.

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It's not ended by this only, there are some more benefits like when the government announces a scheme for financially backward peoples, to give advantages of that scheme to you they will verify your income and it can be done only when you have filed your ITR. ITR also act as a communication medium between you and the government. If you don't file ITR how will the government or anybody come to know about your financial condition?

So the above discussion concludes that you should file your ITR even if your income is less than the exemption limit. If you have any query about this comment your query, thank you & have a nice day.