Every taxpayer has a duty to file his/her Income tax Return (ITR) by due date prescribed. Otherwise on missing deadline taxpayer will have to pay penalty for late filing of ITR. The process of filing ITR needs some preparation in terms of compiling all the necessary documents to be used in the process like income/salary details, bank statements etc. This article discusses the required documents for smooth filing of ITRs.
For a salaried employee, Form 16 is one of the most important documents in the process of filing ITR. It is known as tax withholding certificate or TDS certificate which is to be mandatorily issued by an employer to his/her employer when TDS is deducted, providing details of salary paid and TDS deducted on it. Even if no TDS is deducted, an employee can demand Form 16 from his/her employer for filing accurate details in ITR.
FORM 16 has two parts: Part A and Part B. Part A gives details of Tax deducted by employer. It also contains details of employee’s PAN & employer’s TAN. Part B contains details of the salary breakup i.e. allowances, perquisites, profits in lieu of salary etc.
Before taking Form 16, one must check his/her PAN details and if there is any discrepancy, a revised form must be issued by the employer.
Salary slips provides information regarding allowances such as house rent allowance, transport allowance etc. received by an employee during a year. In nutshell, it provides the breakup of all the allowances received during a year. Since, every allowance has different tax treatment; taking help of salary slip will give a clear picture of exact type of allowance.
Interest certificates are issued by the banks that provide the information pertaining to interest income earned from savings account, post office savings account, FDs and recurring deposits. In case of non-issuance of interest certificates by the bank, one must update his/her passbook to figure out exact details of interest income earned.
When TDS is deducted on the payments other than salaries such as interest earned w.r.t FDs, recurring deposit etc. then Bank will issue Form 16A which contains the details of TDS deducted.
In case of sale of property, Buyer will issue Form 16B showing the details of TDS deducted on the amount so paid.
Form 16C will be issued by a tenant to a landlord when TDS is deducted on the rent amount received by the landlord.
Form 26AS is the consolidated annual tax statement which reflects the details of all the tax paid on behalf of you by your employer, banks etc. It also shows advance tax details and self-assessment taxes paid by you.
This form is downloadable from the Income tax department website using your login credentials. It is advisable to look at this form before final submission of ITR to avoid any mismatch.
Sec. 80C, 80CCC & 80CCD(1) of Income tax Act, 1961 provides various tax saving investments and expenditure that can help reducing your tax liability. The most common tax saving investments and expenditures are EPF, PPF, life insurance premium, National pension system, home loan principal system, tuition fees paid for children etc. The maximum that can be claimed u/s 80C is Rs. 1.5 Lac. So, the documents related to all of them must be kept ready for filing ITR.
Deductions like health insurance premium, interest on education loan etc. are provided by law. So, to claim the benefit of all these deductions without any mistake all the documents pertaining to these deductions should keep handy while filing ITR.
One should not forget to take the home loan statement in case of home loan as it will give an idea as to what extent a deduction can be claimed on account of principal amount u/s 80C and on account of interest u/s 24 of the Income tax Act, 1961.
A taxpayer has to report in his/her ITR any capital gain earned on account of sale of any property, shares, mutual funds etc. So, one must request his/her broking house to provide a statement containing the details of all the capital gains earned during the previous year.
One must keep ready the details of all of his/her bank accounts to ascertain the amount of interest income earned to be furnished under the head ‘income from other sources’.
All the details regarding ownership, purchase, sale, rental income and disposal etc. of property should be kept handy for furnishing under the respective heads i.e. income from house property, capital gains, and income from other sources.
One must remember or keep it with himself the login credentials for beginning the process of e-filing of ITR.
As per Sec. 139AA of Income Tax Act, 1961, providing his/her aadhaar card details has become mandatory for filing ITR. So, one should keep it ready for preventing any delay.