ITR 2021-22: Top 5 benefits of filing ITR before the July 31 deadline

ITR is generally filed to claim the tax deductions and exemptions from the long-term capital gains, however, the benefits of filing the ITR 2021-22 before July 31 are not limited to this

The last date for filing the income tax return (ITR) for the financial year 2021-22 (FY22) is July 31, 2022. Taxpayers with a net annual income of more than Rs 2.5 lakh are legally required to file the ITR before the deadline or they may be subjected to penalties and fines. 

The penalties and fines are specified under section 234F of the Income Tax Act, 1961. These are imposed by the Income Tax Department (I-T department).

The ITR is generally filed to claim the tax deductions and exemptions from the long-term capital gains. However, the benefits of filing the ITR before July 31 are not limited to this. 

Also Read | ITR 2021-22: Important documents required while filing income tax return

What are the benefits of filing ITR 2021-22 before July 31?

Safety from fines and penalties

If one fails to file the ITR, the I-T department may impose a fine on the person. A jail term of 3 years to 7 years may also be imposed. Apart from this, while filing the belated ITR, the taxpayer is required to pay Rs 5,000 as a penalty if the per annum income exceeds Rs 5 lakh. The fine is Rs 1,000 if the income is below Rs 5 lakh. 

Quicker loans

If you are seeking a loan, it is mandatory in most banks to produce the ITR. The return helps the bank in ascertaining the applicant's financial status and capacity. If the ITR is readily available, the loans are likely to get processed quickly. 

Faster visa applications

Apart from loans, the ITR is also asked for during the visa application process. The submission of the latest ITR helps in expediting the application process. 

Safety for freelancers

The freelancers do not have access to Form 16. Without it, ITR is the only document which has a legal record of all their transactions. The ITR helps them in steering clear of financial troubles. 

Higher life insurance cover

Most companies prefer to provide health insurance cover only to the taxpayers. If a person is a tax evader, the bank may decide to lend them any money.