Friday, July 29, 2016

The Benefits of Filing your Tax Returns

A few days ago I happened to do a post on why the Danes were the happiest people in the world. I was amused to discover that the people in Denmark were fond of paying taxes and did their best to pay it on time. Since most financial transactions in Denmark happen through plastic money, cheating on taxes is difficult. Danes consider paying taxes as a sacred duty and in a country where air-surveillance is employed to make sure that everyone gives their dues, to pilfer is a tough task. In countries like Denmark, citizens focus on paying taxes and getting as much as they can, back from the government, in the form of paid maternity leaves etc. The government of Denmark is doing its best to provide the best of facilities to its citizens by judiciously investing the money in the development of the country. 

Coming to our part of the planet.
In India, everyone considers paying taxes a moral and social obligation, but very few go down that road and make sure that they give their dues. While most people are aware of the requirement of filing taxes, many more are still unaware of the implications of not filing returns on time.

The last date for filing returns is 31st July for the financial year ending on 31st March. The government has made it mandatory for all citizens to file returns whether they belong to the taxable bracket of income or not. Filing returns has made it easier for firms and individuals to enter transactions that are in the knowledge of the IT department.

My friend had always nurtured the dream of going abroad for the future seems to be grim in India for research students like us with the slashing of research funds by the government and the sub-standard research facilities in the laboratories of the country. She filed the papers for permanent residence for Canada recently along with me when her visa agent told her that for applying for VISA she needs to show her income tax returns. Since she was getting a meager stipend until now she was not punctually filing her returns. Her agent's words came as a shocker and she decided to start filing her returns immediately, but her dad gave her a pleasant surprise when he told her that he had filed her tax returns in the past. Her dad came as a messiah saving her from the hassles of paying her old returns, as she realized the importance of dutifully paying her dues to the government.   

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These are few of the benefits of paying your taxes on time:-

E-filing of income tax return in India is an effortless task and tax experts like H&R block have made it easier .

One can file returns of the previous years as well.

The financial credibility of the assesse is strengthened thereby making fund procurement hassle free.

Non filing of returns attracts a penalty with minimum Rs. 5,000 and interest under section 234A, so filing returns at the right time is an intelligent move.

You get the luxury of reducing taxable income in forth coming years by the option of carrying forward losses on various heads of income.

Claiming of refunds becomes easier.

The Income tax department won't threaten you by sending scrutiny notices or search and raids.

Getting loans for buying a house or vehicle or an educational loan for your child becomes hassle free if you show your tax returns.

Getting VISA for foreign travel becomes a smooth process if you file returns regularly.

Registration of immovable properties becomes quicker in some of cities of India, if you are regular tax payer.

It is a standard proof of income of a person which stays as a record with the income tax department.

IT returns can be filed after the due date as a belated return.

You can use the amount you give in donations to charity as deductions which are tax friendly, thereby reducing your taxable income.

You can even claim the amount of LIC premiums paid as deduction and reduce the tax liability.

All your income becomes legal with the government having a know-how of the money you earn, making you a responsible citizen of the country.

Since I have also applied for a PR visa to Canada, I won't miss out on the tax returns this year. This is the best I can do to make my visa processing easier. This will also allow the government to invest this money for the progress and development of the country.

I’m taking the #TaxPledge to file IT returns with the easy Income Tax efiling option from H&R Block at BlogAdda.

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