Importance of Filing your Business Tax Returnsadmin
ITR filing is perhaps one of the most fundamental activities in one’s life now, especially if he/she is a well-placed professional or a businessman. Let’s look at the benefits of filing returns.
Saves from prosecution
The most significant advantage of income tax return filing is that it helps you to avoid some severe punishment. Late filings can cut into your profits. Filing returns on time saves you from a lot of physical and mental hassle. You can eventually focus on your business peacefully.
As per income tax laws, you can claim depreciation, by the assets in the name of the business owner. For persons who have not opted for the presumptive taxation scheme, the total taxable earnings can be calculated after deducting all expenses and depreciation allowed as per section 32 of the income tax act. Thus income tax return filing allows you to maximize your profit by availing lucrative deductions such as depreciation.
Avail Presumptive Taxation Scheme
To ease the burden of paying taxes on small businesses and professionals, the income tax department allows such taxpayers to pay taxes only on a portion of their earnings, under the presumptive taxation scheme under section 44AD. Professionals who earn less than 50 Lakhs and businesses which earn less than Rs 2 Crores can avail this scheme. Professionals only have to pay taxes on 50% of their earnings, while businesses on only 8 percent. To avail the benefits of this scheme, taxpayers can file their tax returns using ITR4. Thus filing your tax every year on time will earn you so much of additional benefits. It can really help you to achieve your dreams and success.
Applying for Loan
Both businesses and individuals need loans at different points of time in their life. Your ITR filing document is of much help as you seek loans from banks for your business. The document will act as a proof that your business is in a strong position and you will be able to pay back a large sum of money. Thus filing your income tax return dutifully will help your business to grow at a good pace as it will reap multiple rewards and benefits from various sources. As defaulting attracts punishment, so also filing ITR at the proper time will earn much goodwill from various sources and that is very useful for a business who are at the early stage of their growth.
Carry Forward Losses
Profit and loss is a part of the business. If you have incurred losses, then you can adjust these against the income under the head “profit and gains of business and profession” category. By filing your income tax return, you may be able to carry forward your losses for quite some time. This is, of course, a very strategic benefit for any business. The option to carry forward your losses cannot be availed unless the annual tax return is filed. This means in subsequent years to reduce the amount of taxes payable; you can carry forward past losses to offset your earnings.
Filing ITR on time is beneficial in many ways while keeping you tax-compliant. Outsource your Statutory Compliances to an experienced associate like TalentPro can ensure that you fully complaint in your statutory compliances.