As a business owner, you must file for income tax return which is regarded as highly important in Australia. Based on the income tax return, government determines the amount and means of expenses of individuals and business enterprises. This provides an important platform for the individual to meet all the legal obligations and claim maximize return. Generally those individuals file for ITR who earn a specific amount of income as well as fall under the tax bracket, but other non-liable individuals also file it. Under the income tax, a large part of income is covered, but there are several benefits behind filing tax return.
After you have filed your income tax return, a business owner or a general serviceman, you can claim the refund of the excess tax that you have paid during the financial year. When the advance tax, self-assessment tax or deducted TDS (Tax Deduction Scheme) are higher than the total tax liability, a situation of ‘excess input credit’ arises. If you really want to get your refunds quickly, you should file your individual tax return before 30th June. One important point you should keep in mind that, the application procedure for tax refund is done on a ‘first come first serve’ basis. So, it is always recommended to appoint a professional income tax return consultant.
There are always possibilities of suffering losses in the business. Any investment loss that is suffered by an individual or an enterprise that may fall under different categories like short term or long term, capital or recurring, speculative or non-speculative, will be eligible for tax exemption. You can easily carry forward these losses against the capital gains that you have made in corresponding years. But, you should file ITR, otherwise you will never get the tax exemption on the significant losses you have made.
If you file your income tax return after the due date is over or do not pay tax within proper time, you may have to bear legal implications, pay penalties or suffer other economic drawbacks. As per rules, the amount of penalty can get up to a thousand US dollars. If you fail to lodge tax returns, ATO will release official notices and may prosecute you as an individual or as a business owner. Sometimes, it may lead to imprisonment and paying of maximum penalty. You will definitely not like such situations and so you must seek help from any professional tax advisor.
Planning to go for loans? Be it commercial or personal, the amount and eligibility will depend largely on your average income which will also include income coming from other sources too. In a filed ITR, there will be detailed information and report on all professional and personal earnings, which will be very helpful in sanctioning of loans. National Australian Bank and other financial institutions in Australia indeed ask appliers to show ITR files while processing a request to sanction a particular loan amount.
Are you planning to fly to another country? You will definitely apply for a VISA. And this VISA application will also require ITR receipts to produce. Countries with developed economy like United States, Canada, United Kingdom as well as Australia are the ones which always ask for ITR receipts of the past financial years. Because, it is the ITR file which will be the perfect evidence of how much you have earned and how much tax you have paid. VISA authorities will find this information really helpful for the fact that, they can do the necessary assessment to approve your VISA and also they will get the idea of whether you can fend for yourself in the foreign country or not.
Did you ever wonder how government is able to invest such huge in different fields? Where are these funding coming from? Well, the answer is tax. It is indeed not the only source of government revenue, but definitely one of the primary sources of revenue for the government.
Government collects the taxes via ex-chequer account and invests in different fields like defense, education, healthcare, infrastructural and other developments. There are various government schemes that are launched at different times by the government for the sake of individuals, businesses and societies. So, actually the tax you’re paying, is again coming back to your hands in the form schemes, infrastructure, development and relief plans. Also, as you are paying taxes in the time, you are doing your societal duty, thus becoming eligible to claim your citizenship rights.
Once you regularly file tax return, you will be able to make better planning of taxes, better investment plans and wiser decisions for your business. But it’s better to consult a professional tax consultant, always. If your business is based in Perth, you can contact with Tax Return Perth who can provide you with best tax advisor Perth to guide you with proper methods.