Benefits of Filing Income Tax Return (ITR)

Income Tax Return is a document an individual is required to file with the Income Tax Department on a yearly basis. However, it is not mandatory for everyone to file the Return. If your income in the previous year is above the basic exemption limit of INR 2,50,000 (Rupees Two Lakh Fifty Thousand only), then you are required to file the Income Tax Return compulsorily.

Even though it is not mandatory for some persons to file the Income Tax Return, one should file it every year as there are many benefits of filing it.

Here are some of the major benefits of filing Income Tax Return:
Loans and credits:
In order to urge a loan, one ought to have the revenue enhancement Returns for the last 3 years. All banks and loaning establishments elicit a minimum of 3 years of revenue enhancement Returns to grant a loan to a personal.  At the time of process application, banks and loaning establishments check the declared financial gain and supply to verify the repaying capability of the individual seeking a loan. They use revenue enhancement Returns to verify an equivalent.

In case you’re seeking a private loan, a home equity loan, or a auto loan, it’s essential for you to file revenue enhancement come. If you frequently file revenue enhancement come, you’ll get a loan from any bank or financial organization terribly simply. Even the banks like allotting credit cards to perons United Nations agency file regular revenue enhancement Returns.

Easy to say your TDS:
TDS suggests that Tax subtracted at supply. it’s a Tax subtracted from your financial gain by the person paying the earnings or creating the other payment on that TDS is applicable. The deductor whereas creating the payment deducts the tax quantity and pays it to the revenue enhancement department directly on your behalf.

You may get the tax quantity therefore subtracted by filing revenue enhancement come. If there’s no revenue enhancement quantity collectible at the time of filing the revenue enhancement come, the entire TDS quantity are refunded.

If you’re operating as Associate in Nursing worker in a very company and earning but Rs two.5 100000 a year, you’ll claim your TDS from the Tax department. just in case you’re a man of affairs and need your TDS to urge back in your account, it’s necessary to file Associate in Nursing ITR once a year.

For going out of country
In order to use for a VISA to go to any country, you would like to possess revenue enhancement Returns. whereas giving VISA, embassies officers check the financial gain proofs and address proofs of a personal. Thus, revenue enhancement Returns ar checked by the officers to verify the financial gain and address. Therefore, if you’re going to go abroad, you want to get your revenue enhancement come filed instantly.

From the twelvemonth 2017-18, revenue enhancement come of a previous year will be filed within the same assessment year solely. when the top of the assessment year, the revenue enhancement come of the previous year can’t be filed.

Required for big insurance cover:
If you would like to use for Associate in Nursing insurance cowl of over INR fifty,00,000 (Rupees Fifty 100000 only), the insurance firms elicit revenue enhancement come. The annual financial gain and tax returns facilitate insurers to work out the precise premium quantity and security quantity. Most of the days, revenue enhancement come may be a necessary document for getting Associate in Nursing insurance cowl.

Helps in capital punishment money transactions:
Income Tax come is needed just in case of capital punishment some money transactions. Transactions or payments for house, car, mutual funds etc need revenue enhancement Returns. Some payments for giant investments conjointly would like revenue enhancement Returns.

Address proof:
Income Tax come works as Associate in Nursing address proof in several government organisations and agencies. you’ll use it as Associate in Nursing Address proof in situ of inaccessibility of different documents.

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Clarification regarding transfer of Input Tax credit in case of “Death of sole proprietor

A registered Taxpayer can apply for transfer of Matched Input tax credit that is available in the Electronic credit ledger of taxpayer to another business/another registered taxpayer in case of transfer of business by way of merger/demerger/sale of business by filling of ITC declaration in FORM GST ITC‐02.

But some doubts had been raised about the transfer of credit specially in the case of death of Sole Proprietor for which clarification has been asked, which are as follows:‐
1. Whether transfer of business due to “Death of Sole Proprietor” includes in the meaning of “transfer of business” for the sake of transfer of unutilized Input Tax credit to transferee of business.
2. Further clarification has also been sought for procedure regarding filling of Form GST ITC‐02 in case of death of the Sole proprietor.
Government has issued Clarification through Circular No.‐96/15/2019‐GST on 28th of March, 2019.
Clarification for Point‐1:‐Transfer of Business due to “Death of Sole Proprietor” includes in the reason for Transfer of business for the sake of transfer of unutilized Input Tax credit to transferee of business?

Clause (a) of Subsection 1 of Section 29 provides the reason for transfer of business which includes:‐

1. Death of Proprietor,
2. Amalgamated with Other legal entity,
3. demerged or
4. Otherwise disposed off

As mentioned above Reason for Transfer of business clearly includes “Death of Sole proprietor”. Therefore, Unutilized Matched Input tax Credit of Registered Taxpayer can be transferred to another registered entity for the reason of “Death of Sole Proprietor”.
Conditions to be fulfilled for the transfer of Input tax credit to another registered entity due to change in ownership of business:‐

• In case of registered person undergoes sale, merger, de‐merger, Amalgamation, Lease or transfer, the institution or organization, must file an ITC declaration for transfer of ITC in Form GST ITC‐02
• The Transferor institution had matched the Unutilized amount of ITC in Electronic credit ledger
• The Transferee and Transferor both should be Registered Taxpayer under GST
• Transferor Must file all the GST returns of past periods
• All the pending transactions for the action of merging should either be accepted, rejected or modified and all liabilities of the returns filed by the transferor must be paid
• The transfer of business has to be with an accurate provision of transfer of liabilities which will be the stayed demands of tax, or with any litigation /recovery cases. It has to be accompanied by the certificate that is issued by the Chartered Accountant or Cost Accountant

Clarification for Point 2:‐Procedure for filling Form GST ITC‐02 in case of “Death of Sole Prioprietor”
`In case of death of sole proprietor, if the business is continued by any other person being the transferee/Successor, the unutilized ITC amount remains in the electronic credit ledger shall be transferred to the transferee as per the provisions and manner stated below:‐

• Registration of Transferor/Successor: ‐
  Transferor/Successor shall be liable to be registered with effect from the date of such transfer or Succession, where a business is transferred to another person for any reasons including death of proprietor. In other word while filling the Form GST REG‐1 electronically on common portal (http://www.gst.gov.in) the applicant is required to mention the reason to obtain registration as “death of the proprietor”.
• Cancellation of registration on account of death of proprietor:‐The legal heirs of the deceased sole proprietor is allowed to file FORM GST REG‐16(form for cancellation of registration) electronically on common portal on account of transfer of Business for reason of death of proprietor. While filling FORM GST REG‐16 following need to be mentioned
• – reason for cancellation as Death of the proprietor
• – The GSTIN of the transferee to whom the business has been transferred, to link the GSTIN of the transferee with The GSTIN of theTransferor
• Transfer of Input Tax credit along with the liability:‐ It is clarified in the circular that the transferee / successor shall be liable to pay any tax, interest or any penalty due from the transferor in cases of transfer of business due to death of sole proprietor.
• Manner of Transfer of Credit: In case of Transfer of business on account of “Death of Sole Proprietor” Following will be the procedure:‐
  1. The transferee / successor shall file FORM GST ITC‐02 in respect of the registration which is required to be cancelled on account of death of the sole proprietor
  2. FORM GST ITC‐02 is required to be filed by the transferee/successor before filing the application for cancellation of such registration
  3. Upon acceptance by the transferee / successor, the un‐utilized input tax credit specified in FORM GST ITC‐02 shall be credited to his electronic credit ledger.

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