Filing tax returns is a herculean task, especially if you are a business owner and you have to manage your business tasks along with filing your business tax returns. However, regardless of how tedious you find filing your tax returns, it is very important that you file your business tax returns because it bears a number of benefits that may work in the favour of your business.
Filing business tax returns take a lot of hard work but if you have the effective workforce, it can be done well within time. Let us take a look at why it is important for businesses to file their tax returns.
Filing your tax return becomes essential if you have a loss arising under the head ‘Profit and Gains of Business and Profession’. It becomes necessary if you wish to carry forward your losses to the next year and then set off the amount in the future income. And if you wish to carry forward this loss to the next year, you will be required to file your IT returns on or before the due date. This will result in a reduction of taxable income, thereby reducing tax payable in the future years.
Raising adequate capital is a very important aspect if you want to start or grow your business as any business whether big or small requires some sort of financial assistance. If you are in tight financial situations, business loans alleviate them and open new opportunities for you. The primary objective of getting a business loan is to grow your business and activities. However, banks providing loan need your most recent Income Tax Return as well as the calculation of income as one of the many documents that you need to submit. Therefore, filing your business tax return is very important if you want to apply for a loan from the bank.
[ Read: How to File ITR-4 Form ]
Evasion of income tax is a crime and you can face some severe penalties in case you fail to file your IT returns. There are some late tax filing penalties as well that can be levied on you if you fail to file returns on time. Therefore, filing your tax returns for business is equally important if you wish to avoid being penalized for late filing of returns or tax evasion.
Your value as a business profile somehow depends on your yearly income tax returns. In case you are a contractor you sometimes have a very good chance of procuring projects. A lot of contractors lack the knowledge as well as the benefit of filing their tax returns on time or they haven’t filed the returns at all. It is very important for you as a contractor to not only file your returns on time but it should also be very accurate and should be audited if required. It so happens that sometimes for tender approval the scrutiny committee might check up to 5 to 7 years of your IT returns to determine if you are capable of doing and then come mature the tender in the favour of the candidate that fits the best. Therefore, it is essential to file your taxes well within time.
If you have assets in your name or your business’ name, the income tax department allows you to claim depreciation. This depreciation is allowed only to the owner of the asset and this asset should be used for business and profession purposes only to claim the depreciation. Also, if you have calculated profit on the presumptive basis under Section 44AD or 44AE, such profit is considered after all the expenditures and depreciation that is allowed under Section 32. Therefore, you can take the benefit of depreciation to claim deductions while filing IT returns.
H&R Block India is a tax expert company with having the record of successfully filing more than 6 lakhs and counting. We have a team of highly qualified, professional and dedicated team of tax experts who will file your ITR-3 and ITR-4 business tax returns for you. Sit back and relax while we do the draining work of filing your IT returns.