Future Generali

What are the benefits you receive from paying income tax?

As any informed citizen knows, income tax returns are an essential part of the finances that go into developing the country’s infrastructure, running various government programs and maintaining central institutions. Which is why filing income taxes is genuinely an essential responsibility of every citizen.

However, did you know that apart from contributing to the country’s growth and development, there are several benefits of paying income tax that the taxpayer can himself enjoy? Filing regular income tax returns establishes your credibility with financial institutions, giving you access to a range of credit and investment products.

Let us take a look at some of the primary benefits of paying income tax:

  • Simplify loan approval: Most banks are likely to ask for your income tax returns as a part of your loan application process to assess your income amount and source. Hence, if you wish to avail loans, whether during a financial emergency or not, paying your income tax returns regularly will put you in the right position with potential lenders.
  • Visa processing benefits: If you are planning to visit abroad, make sure to keep your income tax returns handy as most embassies and consulates are likely to ask for them. In most cases, one of the steps in the visa application process itself would demand your income tax returns that are expected to span a given number of years from the past.
  • Claim your tax refunds: One of the most significant benefits of paying income tax is that if you’re eligible to receive tax refunds from the Income Tax Department, this is the only one way to know. In cases such as regular dealings with TDS (tax deducted at source) or excess tax, you might just find yourself eligible for a full tax refund from the government.
  • Carry losses forward: Within a financial year, you may have suffered damages such as speculation loss, capital loss or business loss. Your income tax returns are the only way for you to carry them forward to subsequent years and thereby balance them against your future income.
  • Proof of address and income: Lastly, apart from all these benefits, the receipt of your income tax returns is a comprehensive document that serves the purpose of providing legitimate address and income proof.

Read Next

image

I earn ₹12 lacs per year. What is my tax liability exactly?

In India, there are different tax rates for different levels of incomes. Find out what Income Tax Sl…
Read more.

image

How to save tax on long-term capital gains?

If you have received and income tax notice and are wondering what to do next, here is a handy guide …
Read more.

image

What is covered under 'Income from other Sources'?

Income from other sources includes all receipts that cannot otherwise be classified under any of the…
Read more.

image

5 things to keep in mind while choosing the right tax saving plan by Future Generali India Life Insurance

To help you meet your financial goals, it is important to have a personal financial planning process…
Read more.

image

Go Beyond 80C Tax Benefits. Turn into a Smart Tax Saver.

Go beyond 80C tax benefits to become a smart tax saver. Here is a complete list of tax-free deductio…
Read more.

Disclaimer and Links