Filing your Income Tax Return (ITR) is more than just a formality; it’s a crucial step in your financial journey. It’s the process through which you report your earnings and tax liabilities to the Income Tax Department, ensuring compliance with tax laws and enabling various benefits like tax refunds.
Even if you’ve paid advance tax, filing your ITR remains mandatory under certain circumstances. The Income Tax Department requires individuals to file returns if their income exceeds specified thresholds, regardless of advance tax payments.
These thresholds include:
- Deposits exceeding ₹ 1 crore in one or more current accounts.
- Expenditure over ₹ 2 lakh on foreign travel.
- Expenditure over ₹ 1 lakh on electricity bills.
- Total business turnover exceeding ₹ 60 lakh or professional gross receipts over ₹ 10 lakh.
- Total tax deducted or collected over ₹ 25,000 (₹ 50,000 for senior citizens).
- Aggregate savings account deposits over ₹ 50 lakhs.
Even when advance taxes are paid, reporting them through ITR is essential for self-assessment and tax computation. Failure to file can lead to penalties.
Additionally, filing ITR aids in reconciling tax records and claiming refunds. It provides a comprehensive view of your financial transactions, essential for various purposes like loan applications and visa processes.
Certain exemptions exist, such as for senior citizens with pension income or individuals below the basic exemption limit. However, filing ITR can still be advantageous, enabling you to claim refunds and providing vital documentation for financial and visa applications.
In conclusion, while advance tax payments are significant, filing ITR remains a critical step in ensuring tax compliance and maximising financial benefits.
