A business owner shall manage his business along with filing income tax returns regularly. It is quite important to file the business income tax returns as it features a number of benefits that might help in your business.
Though filing business tax returns gulp down a huge hard work, the effective workforce makes the filing returns easy. We shall discuss here the benefits of Business income tax returns.
Whether the business is big or small, an adequate financial assistance is required to start and run the business successfully without any impediments. In any tight financial situation, opting business loans reduces the burden and help in the business growth. A Loan is availed by the bankers only to help in your business improvement. However, without your income tax return filings, no banker will provide the loan. To avail a loan, recent income tax return and its related documents shall be produced. So, filing Income Tax Return is quite important for obligating any financial loans from the bankers.
Your business profile value somehow depends on your yearly income tax returns. If you are a contractor, then your IT returns will help you to procure projects. Many contractors do not have enough knowledge on IT return filings and its benefits, so they are left with no chances. Every contractor has not only to file his IT returns, but also the filed returns should be accurate and audited if necessary. Sometimes for the Government Tender Approval, the Scrutiny Committee might check seven years of IT returns in order to come to a conclusion that whether you are capable of bidding to the tenders. So, it is necessary to file the IT returns within the time.
Carry Forward Loss
When you meet out with a loss arising under “Profit & Gains of Business and Profession”, then the income tax return filing is essential. It is necessary when you carry forward the losses to the next year and set it off in the future. You should file IT returns when you would like to forward the loss to the next year. Such a return filing will reduce the taxable income and tax payable in the coming years.
Shield from Penalty and Prosecution
Income Tax evasion is a crime. In case, if you fail to file IT returns, you will be penalized. If you fail to file the Income Tax Returns on time, a late tax filing penalties will be applied to you. Hence, filing IT returns on time is quite essential in order to save you from legal prosecution and unnecessary penalties.
If you file IT returns on time only you can claim the Tax Refunds. Based on the Tax Return filed, a refund is paid at 8% of interest per annum. If the IT tax is not filed, but TDS is deducted then you will never get a refund and finally, you may end up with money loss.
IT return filing is essential to make any kind of investment and IT returns only prove that you have a valid income source to do such investment.