Top Benefits of Filing ITR for Businesses
Income Tax Returns is a form of declaration about incomes and expenses, exemptions, deductions, and the resultant taxable income. Staying compliant is mandatory for all businesses. Filing your returns on time following the prescribed procedures is also critical to avoid any penalty. This is the most important annual activity for all businesses. Let us take a look at the top benefits of filing ITR on-time.
Acquiring Loans Is Easier
Your IT Returns is proof of your financial stability and health. Banks usually ask for these receipts for the previous 3 consecutive years to study your financial health, your compliance status and your business growth. This gives them more confidence to process any loan requests. Eligibility, the quantum of loans and repayment capacity are all evaluated based on the financial health and growth pattern. The ITR stands to serve this purpose.
Income tax rules enable you to carry-forward losses to the subsequent years. What is the advantage? Well, you may have incurred loss in a specific financial year, yet you cannot avoid filing your IT return for any reason. You can set off the losses against the income/capital gains only if you file IT Returns the next financial year. Any residual losses after such set off can be carried forward to subsequent years and is available for set off in those years, subject to certain restrictions.
Participating in Government Tenders
During the course of your business, you may want to bid for a Government project through tender. To be eligible to participate in tenders, you must have filed your returns every year and will be required to submit the receipts as supporting proof. This is to evaluate your financial strength to execute the project.
Avoiding Penalties & Late Fees
Filing IT Returns on-time is mandatory to avoid any penalty. If you file beyond the deadline, a late fee is levied. Also, note that an unpaid tax liability attracts interest. In extreme cases, this can also lead to litigation. With some discipline, these can be avoided.
Staying compliant and on the right side of the law is always important and helps one to focus on the growth of the business rather than dealing with other unnecessary distractions.
Initiate this activity for your business immediately. Reach out to Pratique CFO Services, and our expert team will take you through the process effortlessly and help you file your returns on time!