10 documents to keep ready when filing your income tax returns

7 MinsOct 13, 2021

This year the government has relaxed timelines for filing Income Tax Return (ITR) to December 31, 2021 (from the usual July 31, 2021). This is for assesses who are not subject to audit and hence, will apply to most individual salaried and non-salaried taxpayers. Let us take a look at the important documents you need to keep ready before filing your ITR. 

file income tax returns

1) Form 16 – This is a key document to file your ITR if you are a salaried individual. It is a mandatory document to be issued by an employer to all salaried employees whose income tax is deducted at the source. Form 16 certifies that under Section 203 of the Income-tax Act, 1961 tax on salary is deducted at source. 

Part A of the form mentions the employer’s and employee’s full address, their Permanent Account Number (PAN), the Tax deduction Account Number (TAN) of the employer, the amount of tax deducted and deposited by the deductee for relevant Assessment Year, challan numbers. Part B mentions details of salary paid, any other income, exemptions and deductions availed, plus the tax deducted, which are necessary information to prepare and file your Income Tax Return are given. 

2) Form 16A/Form 16B/Form 16C/Form 16D – If you have earned interest income above Rs 40,000 in a financial year and are a non-senior citizen who has not provided self-declaration in Form 15G, or you are a senior citizen who has earned interest up to Rs 50,000 per financial year and self-declaration in Form 15H is not furnished against the bank term deposits; do not forget to collect Form 16A from your bank. 

If you earn more than Rs 2.4 lakh as rental income, you are liable to pay tax. Your tenant has to deduct this tax at source (TDS), before paying you rent. Say you are earning monthly rent of Rs 50,000, which means the annual income from rent is Rs 6 lakh. Ensure that your tenant deducts the tax at source and provides you with Form 16C for the details of the tax deducted.

Similarly, if you have sold an immovable property (land, but excluding agricultural land/ /building/part of the building) whose value is over Rs 50 lakh, then request the buyer to issue Form 16B for the tax deduction at source on the amount paid to you. 

If you have received commissions, brokerage, contractual fees, or any other fee while rendering professional service, ensure you receive Form 16A from the person/organisation to whom the service is provided. 

These certificates are issued under Section 203 of the Income-tax Act, 1961 for tax deducted at source, on income other than salary. They mention the details of the deductor and deductee, such as name, address, PAN, TAN of the deductor, assessment year, period, and the details of tax deducted and deposited with the central government. 

3) Form 26AS – This is a tax credit statement, or popularly also called the tax passbook. It includes information relating to…
- Tax Deducted at Source
- Tax Collected at Source
- Specified Financial Transactions
- Payment of taxes
- Income tax demand and refund
- Completed proceedings

Pending proceedings; Form 26AS consolidates the tax deducted from all sources (under Part A1 and A2 of the Form), details of tax collected at source (under Part B of the Form), advance tax paid by the assessee, self-assessment tax paid, regular assessment tax (under Part C of the Form), details of refund (if any) in the financial year (in Part D of the Form), details of certain high-value financial transactions (in Part E of the Form), details of Tax Deducted at Source on Sale of Immovable Property, rent received from a property, professional fees (under Part F of the Form), and TDS defaults if any (under Part G of the Form). You can download Form 26AS from the website of the income tax departement-incometax.gov.in. 

4) Proofs of Investments made Tax-saving Instruments – During the financial year 2020-21, if you have invested in tax-saving investment instruments, viz. Public Provident Fund (PPF), National Savings Certificate (NSC),  5-Year tax saver fixed deposit, Sukanya Samruddhi Yojana (SSY), Senior Citizen Saving Schemes, Equity Linked Savings Scheme (also known as tax-saving mutual funds), National Pension System (NPS), savings bonds, or paid a premium on life insurance policies or tuition fees of your child, etc . you are eligible for a deduction under Section 80C, or Section 80CCC, Section 80CCD(1), 80CCD (1B) or 80CCD(2) of the Income Tax Act, as the case may be. Keep ready the investment statements, receipts, passbooks, and certificates with respect to these, for filing ITR. 

5) Capital Gain Statement – Say you made gains on investments in mutual funds, shares, property, and/or gold, and the profits were booked during the financial year; you must report these gains (either Short Term Capital Gain or Long Term Capital Gain).

You can get the capital gain account statement for mutual funds from the website of CAMs, and KFintech (the Registrar & Transfer Agents). While in the case of shares, you can check with your stockbroker for the statement. Likewise, to compute capital gains on property and gold sold during the financial year, you may reach out to your Chartered Accountant or tax consultant.

6) Premium Certificate for Health Insurance Premium Paid – The premium paid for health insurance is eligible for deduction under Section 80D of the Income Tax Act. The exemption limit for yourself and your dependent family members, including parents, is Rs 25,000 per financial year. For senior citizens, the maximum deduction is Rs 50,000 per financial year. So, you could claim up to Rs 75,000 tax deduction if your parents are senior citizens and you are paying their health insurance premium. Hence, make sure you have downloaded the premium certificate from the website of the health insurance company to avail of this deduction.

7) Interest Certificate on Home Loan – If you have a home loan from a bank or Non-Banking Financial Company (NBCF), the interest paid on the home loan entitles you to a deduction under Section 24(b) up to Rs 2 lakh. The principal amount repaid during the financial year will be eligible for a deduction under Section 80C of the Income Tax Act. Hence, ensure that you get the interest certificate from the website of the bank or NBFC.

8) Interest Certificate of Education Loan –If you have an ongoing education loan or have availed of one in the financial year, get the interest certificate from the bank/financial institution, or approved charitable institution from where the education loan is taken. The interest paid on the education loan is available as a deduction under Section 80E for a maximum of 8 years or till the interest is paid, whichever is earlier.

9) Donation Receipts – Any donation made to a certain specified fund, charitable institution, approved educational institution, etc., in the financial year, entitles you to a deduction (50% or 100% of the donation amount) under Section 80G. To claim a deduction under this section, ensure you have all the details of such payments. Hence keep all the donation receipts.

10) Copy of Savings Account Passbooks – Section 80TTA of the Income Tax Act, 1961 provides a deduction of up to Rs 10,000 on the interest income earned on the Savings Account. The interest income exceeding Rs 10,000 is taxable under the head ‘Income from Other Sources’ as per your tax slab. Banks do not deduct tax at source on the interest you’ve earned on the savings bank account. Hence, keep a copy of your saving account passbook ready and make sure you avail of this deduction when you file your ITR.

[Also Read: What ITR Form You Should Use to File Your Returns]

Besides, make sure you pre-validate all your bank accounts and link them with your PAN because only then the Income Tax Department will be able to issue e-refunds (if any).
Moreover, make sure your Aadhaar is linked with your PAN. The revised deadline to do so is March 31, 2022. If you fail to link the two, your ITR may not be processed.

Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.