Filing Income Tax returns in India is a time-consuming process that needs preparation in terms of collating the income tax proof submission documents by the taxpayer. These documents usually include your proof of income from various sources, along with the investments done in a given financial year. Any missing document to file an income tax return might have a bearing on the amount of tax you shall be liable to pay for that financial year. The Government of India usually provides a sufficient four-month period to collate all your income tax proof submission documents and file your taxes.
Documents needed to file your Tax Return
The filing procedure depends on the documents required for income tax return and here is a detailed document checklist for filing income tax return on Form ITR-1.
1.PAN and Aadhaar
- Permanent Account Number (PAN) is the first and foremost document that must be kept handy while filing tax returns
- As per Section 139AA of the Indian Income Tax Act, an individual must provide his/her Aadhaar for successful filing of their income tax returns
Linking PAN with Aadhaar is mandatory for taxpayers before filing their tax returns.
2.Form-16
If your income earned is in the form of a salary provided by an employer, Form-16 is one of the key documents required for a tax return. Form-16 is a mandatory certificate issued by your employer that provides information about your salary earned during a given financial year, and the Tax Deducted at Source (TDS) on it, as applicable. Form-16 is divided into two parts – Part A and Part B.
- Part A – Reflects the information on TDS by the employer during the year, along with your PAN and employer’s TAN
- Part B – Comprises details of your gross salary and its components like exempt allowances, perquisites, profit instead of salary, etc.
3.Salary Slips
Besides exempt allowances and perquisites, your salary slips indicate other taxable details such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), medical allowance, personal allowance and so on. Different tax-saving options are available based on the kind of allowance. The personal allowance is fully taxable while all other allowances have a maximum limit for exemption.
4.TDS certificates for income earned from other sources
- Form-16A: TDS certificate issued by the bank for tax deducted on non-salary income received in the form of interest amount earned on deposits such as Fixed Deposits, Recurring Deposits, etc.
Form-16B: TDS certificate provided by the buyer showing the tax deducted when you sell a property
- Form-16C: TDS certificate issued by a tenant to the landowner indicating the details of TDS deducted on the rent you receive. It is applicable in cases where the rent received by the landlord exceeds Rs 50,000 per month
5.Form 26AS
It is a consolidated statement of annual taxes paid by you and comprises of all tax details that flow through your PAN that may include:
- TDS deducted by an employer for salaried persons
- TDS deducted by banks on interest income exceeding Rs 40,000. For senior citizens, the exempt limit is Rs 50,000
- TDS deducted by any other organisation from whom you might have received a payment
- Self-assessment taxes and Advance taxes paid, if any
Form 26AS is a crucial document that accounts for all your taxes paid in a given year. Any mismatch in Form 26AS could deprive you of a tax credit for the said tax deduction. The form is downloadable from the TRACES website.
6.Investment proofs claiming tax exemption
You are eligible to claim tax exemption on investments and their expenses up to Rs <1.5> lakh under Sections 80C, 80CCC, 80CCD (1) of the Indian Income Tax Act. Some of the most common tax exemptions that can be claimed under Section 80C include:
- Premium paid towards Life Insurance Policies
- Amount invested in Equity Linked Savings Schemes (ELSS)
- Employee Provident Fund (EPF)
- Public Provident Fund (PPF)
- National Pension System (NPS)
Besides claiming tax benefits under Section 80C, you can also claim tax deduction under Sections 80D and 80E in the following cases:
Section 80D – For persons aged up to 60 years, tax deductions can be claimed for an amount up to Rs 25,000 and for those aged above 60 years, the exemption limit is up to Rs 75,000
Section 80E – Tax deduction can be claimed for interest paid on education loan towards higher studies and there is no upper limit
7.Home Loan Statement issued by the lender
If you are paying a Home Loan EMI every month, a home loan statement is an essential document to file your tax returns. The loan statement gives details about the principal and interest components of the loan amount. Under Section 24 of the Indian Income Tax Act, the loan borrower is entitled to claim a tax exemption of up to Rs 2 lakh on interest paid towards the loan during a given year. The interest paid and rent received if any must be furnished at the time of filing returns with ITR-1.
Conclusion
Filing your income tax returns on time is important as you shall attract a penalty of up to Rs 10,000 for late filing. So, it is essential to keep a document checklist for filing return along with the original documents in place before submitting your ITR form without a delay.