Form 16 / Income Tax Returns

For eligibility in all loan applications from Banks : 

Income tax returns of last three years are the basic need for all loan cases like housing, business or personal loan, and is a declaration of your income. Before granting the loan, banks want to know your financial capacity and your income details as shown by you in income tax returns.

Filing returns may prove useful in case of revised returns:

In case the assesse hasn’t filed the original return, he cannot subsequently file a revised return, even when he really needs to. Under the Income Tax Act, non-filing of returns can attract a penalty of Rs 5,000. So while filing returns is a voluntary activity, there are times when it could hold legal implications for those who do not do so, especially if they must file a revised return in future.

Filing returns is a sign you are responsible :

The government mandates that individuals who earn a specified amount of annual income must file a tax return within a pre-determined due date. The tax as calculated must be paid by the individual. Failure to pay tax will invite penalties from the Income Tax Department.

Those who earn less than the prescribed level of income can file returns voluntarily.

Filing returns is a sign that you are responsible. Not just that, it also makes it easier for individuals and businesses to enter into subsequent transactions since their income is recorded by the tax department with applicable tax, if any, having been paid.

 Filing returns is mandatory in some cases :

Even if your income level does not qualify for mandatory filing of returns, it may still be a good idea to voluntarily file returns. In most states, registration of immovable properties requires advancing as proof the tax returns of last three years. Filing returns makes it easier to register the transaction.

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