Besides, of course, the obvious feelings of being a dutiful and responsible citizen of the country, it is imperative that individuals file Income Tax Returns (ITR) to reap a host of nuanced and personal benefits. Aside from the numerous perks associated with filing an Income Tax Return, and the variety of options available, assessees certainly are enticed to mow the yield for a task that takes them only a few minutes. A person’s income tax documents are very important when it comes to securing a home loan. Let us see how ITR filings help in loan securing.
Income Tax Department’s Recognized Types of ITR
Knowing one’s category and the types of ITR is essential information. The IT Department issues seven types of ITR forms according to an individual’s eligibility, amount, and source of income. They are as follows:
- Salary, pension, and one-house property income under Rs 50 lakhs.
- Individuals earning more than Rs 50 lakhs through salary, capital gains, more than one house, foreign income/assets, or holding directorships in companies that are not publicly traded.
- The ITR 3 is for individuals earning more than Rs 50 lakhs from salaries, capital gains, holding shares of a private company, holding directorships, or holding foreign income/assets.
- Every income from ITR 1 along with a presumptive income of more than Rs 50 lakhs.
- The ITR 5 is applicable only to firms, LLPs, associations, and bodies.
- In case of an ITR 6, the company does not claim any exemption under Section 11. (Section 11 of the Income Tax Act provides an exemption for income derived from property held under trust, wholly for charitable or religious purposes, to the extent such income is used for charitable or religious purposes within India.)
- In ITR 7, individuals/companies are subject to Sections 139 (4A), (4B), (4C), and (4D).
House Loans and the Benefits of Filing ITRs on Time
As a result of sky-high property rates, allowing oneself assistance with a house loan is one of the most convenient methods of building and funding a home. Applicants must provide documents proving their creditworthiness and credibility in financial transactions/investments in order to qualify for these loans.
Besides KYC documents (like a proof of address and/or other identity proofs) and property documents (like a chain of records and/or title deeds of the land), one also needs to timely obtain and submit other documents
- You’d need to provide tax-related documents on the lender’s demand, such as your income tax return (ITR) for the past 3 years (at least).
- As well as proof of a steady income, this is crucial.
Is it necessary to file an ITR for non-salaried applicants as well?
Income tax filing is important for both salaried and non-salaried individuals because the lender will be able to better understand the business, the nature, and extent of existing borrowings, the profitability of the business, and the size of the investment made by the individual. As a result of not paying interest, they are able to pay their EMIs in a timely manner, which ensures their financial stability. As a result, loans are made much easier and faster, and both parties are assured that they can repay the debt.