benefit of filing tax return when below tax limit

Every responsible and earning citizen of India is sure to be found calculating, tabulating and crunching numbers at this time of the year. Come July and the deadline for filing one's tax returns begins to loom large.
This process is compulsory for all citizens whose gross total income - which includes income from salary, business, capital gains, property and other sources, before allowing for deductions - exceeds the basic exemption limit

These are people with gross total income (GTI) below the exempted limit of Rs. 2.5 lakh. For individuals aged above 60 years but less than 80 years, this exemption limit is Rs. 3 lakh and for individuals aged above 80 years, the exemption limit is Rs. 5 lakh. For these people, if the date is extended or not, does not really matter. 

The gross total income refers to the total income from the five heads of income and is calculated before allowing any deductions under sections 80C to 80U of the Income-tax Act, 1961. So, if one's gross total income is say, Rs 3.30 lakh and investment under section 80 C is Rs 1 lakh, the taxable income becomes Rs 2.3 lakh, the ITR still needs to be filed as GTI exceeds exemption limit before adjusting for deductions.

Benefits of filing ITR

Even though filing of ITR is not mandatory for some individuals, there are certain benefits that one can avail of provided the ITR has been filed. Here are few of those: 

Claiming refund: There could be a possibility that there has been tax deducted at source (TDS) on some investment made in the name of the individual. "If TDS has been cut, one will have to file the ITR to claim refund of the same

Processing of documents: While applying for loans, the eligibility and quantum of loan would depend on one's income which can be established through filed ITRs. "Income tax return gives you a detailed picture of your total income earned during a year and taxes paid on it. Moreover, these documents are accepted by various agencies for easier loan and visa processing 

Carry-forward of losses: Income tax rules allows carry-forward losses to set them off against capital gains only to those who file ITR in the relevant assessment year. "There are possibilities that you may have incurred losses for a year. In such a scenario, you cannot stay away from filing of your return saying you have an income below the exemption limit. In fact, you must ideally file your return so that you can carry forward the losses you have incurred to set it off against ..