. Statutory Compliance
Income Tax Return is to be necessarily filed in India if your Gross Total Income exceeds Rs.2.50 lacs (for normal taxpayers and Rs.3.00 Lacs (for Senior Citizens). Also it is necessary for firms/companies to mandatory file Income tax return irrespective of its turnover or income.
Thus if you are fulfilling the above criteria, it is mandatory to file Income tax return. Non filing of the same results in penalty, uinterest on tax and can even lead to prosecution if there is an escapement of tax.
2. For faster and easy processing of Bank loans etc.
It you are in need of any bank loan such as housing loan, cash credit, term loan or any other loan, then the bank or other financial institution will ask for Income tax return for 2-3 years so that an estimate of your income can be made and the loan can be sanctioned based on your income and other details. The Income tax return serves as final proof of your income. Hence it is advantageous to file income tax return in time and order.
3. For Visa applications
It you are applying for any visa, you may need income tax return which are required by the foreign embassy to judge your wealth & income in india. Based on your income tax return position, the visa etc. are granted or rejected. Hence if you are planning to travel abroad, Income tax return filing is must.
4. If there is any excess tax deduction, refund can be granted only by filing IT returns
If there is a tax deduction from any source such as FDR, any other post office deposit, salary income, any other income such as commission, professional fees, rent, contractual income and your income falls below minimum income slab or your tax deduction is more than the actual tax you are required to pay, then you can get refund of that excess tax deducted from income tax department. However for getting the same, you need to file your income tax return. Refund of income tax can only be received by filing your income tax.
