Tax filing is compulsory for those with a taxable income of Rs 2.5 lakhs and above, and in other specified scenarios.
There are many benefits to filing tax returns.
Tax returns from the past years are needed when applying for loans like vehicle or home loans. They serve as evidence of your income. They may also be required for certain credit cards, insurance policies, etc.
As COVID normalizes, international business travel will increase. Many countries' immigration authorities require past tax returns for income verification. These are essential for visas to the US, UK, Canada, and Schengen areas.
Salary slips serve as income proof for employed people. However, self-employed individuals lack this proof. Here, a tax return can be used instead.
People invest in various assets like stocks, bitcoins, and real estate. Sometimes, these assets are sold at a loss. Some of these losses can be carried forward for 8 years if a tax return is filed.
Examples of taxable income include:
Wages and salaries
Profits from business and property
Dividends, interest, and rental income
Examples of non-taxable income include:
Certain types of gifts and inheritances
Some types of insurance payouts
Certain government benefits
Specific type of investment income
Understanding non-taxable income is key to maximizing tax benefits and improving your finances. Including non-tax able income in your tax returns can lower your tax liability, help you qualify for tax credits and deductions, avoid penalties, and strengthen your financial profile. It's crucial to know what counts as non-taxable income and to correct any misconceptions. Consider consulting a tax professional for guidance. This way, you can fully utilize your tax returns to enhance your financial future.
If you're having difficulty filing tax returns, The Tax Heaven can help. We ensure accurate filing and assist you in getting maximum tax refunds. Hire our eCAs to file your ITR today!