Documents required to file ITR

Income Tax is a direct tax, that is, levied on any individual’s or entity’s income during a financial year. It is directly paid to the government, like all the other direct taxes. The net taxable income is considered to calculate the tax liability of the individual or entity based on the income slabs provided by the Income-tax Department for the current financial year. The amount of tax paid depends on the money earned by the individual in that particular financial year.

What are ITRs?

Income Tax Returns or ITRs are specially designed tax filing forms to be filled by all taxpayers at the end of every financial year within the deadline issued by the Income Tax Department. 

With the help of different types of ITRs, taxpayers disclose all the income and assets held to the Income Tax Department of India, which can determine the actual tax liability of the individual taxpayer, help them to apply for refunds if the actual tax liability of that individual is less than the tax paid by the individual, and also helps individuals to schedule tax payments. All the different sources of income are considered, be it salary, capital gains, dividends, interests, income from foreign assets, or other sources in filing ITRs. Generally, the 31st of July of the assessment year following the financial year is set as the last day by the officials to file Income Tax Return for any particular financial year.

What are the Documents required to file ITR?

There are various deductions available under different sections of the Income Tax Act. Provisions in the Income Tax Act 1961 provide for various deductions under specified sections. Deductions can be claimed against Investments, Allowances, etc., which can reduce the taxable amount of an individual. For claiming these deductions and filing Income Tax Returns, taxpayers need to submit various proofs related to the source of income, specified investment, and expenses incurred by them. Here is a list of various documents that are required for filing ITR:

1. PAN Card

A PAN card is the most necessary and first document required to file an income tax return. The name of the taxpayer on the PAN card must be the same as the one stated in ITR. PAN is also required for deduction of TDS and should be linked with the bank account of the taxpayer for direct credit of income tax refund (if any). PAN is a government-issued identity card with a unique 10-digit alphanumeric code that serves many purposes. Aadhaar card can also be used to file ITR instead of PAN according to the latest amendment by the government.

2. Aadhaar Card

Biometric and demographic details of residents of India are contained by UIDAI-issued Aadhaar cards and act as unique identity proof for many purposes. Section 139AA of the Income Tax Act specifies that Aadhaar card details should be provided at the time of filing an Income Tax Return. In case any individual doesn’t have an Aadhaar card but has applied for one, the enrolment ID provided at the time of registering for Aadhaar can be used while filing an IT return. Also, it has been made mandatory to link Aadhaar with PAN.

3. Form 16

Form 16 or Salary certificate provides details relating to salary paid, taxes deducted and deposited during the financial year, which is issued by the employer. It is mandatory for an employer to issue Form 16 if any employer has deducted taxes. Form 16 is a mandatory document required for a salaried individual that consists of two parts, which have the TRACES logo and a unique ID.  Part A of Form 16 contains details of the tax deducted by the employer during the financial year, along with the PAN and TAN details of the employer. TDS calculations like gross salary breakup, exemptions allowed, perquisites etc., are mentioned in Part B of the Form.

4. Form 16A/ Form 16B/ Form 16C

For any income received other than salary such as income received from recurring deposits, fixed deposits, selling of property, etc., a different Form is issued. For income received as recurring deposits, fixed deposits, etc., Form 16A is issued. It is issued by deductors like banks, contractors, etc. On the other hand, Form 16B is issued when a person sells his property. It is issued by the buyer of the property. Form 16C is a TDS certificate that shows the TDS on rent @5% by an individual or HUF under section 194IB. 

5. Bank Account Details

All active bank accounts should be declared in the ITR. The bank name, account number, IFSC code, etc., of all the active bank accounts of the taxpayer, should necessarily be mentioned at the time of filing of return. One bank account should be selected as the primary for transferring all the tax refunds by the Income Tax Department to the concerned party.

6. Form 26AS

An annual tax statement like a tax passbook that has all the details of all the taxes deposited against an individual’s PAN. Following are the items that are included:

1. TDS deducted by the bank
2. TDS deducted by the employer
3. TDS deducted by other organisations from the payment done by the concerned party
4. Advance taxes deposited by any individual
5. Self-assessment taxes paid by the individual

It is the responsibility of the individual to make sure that all the taxes that are deducted in the financial year are shown in Form 26AS against the PAN.

7. Tax Saving Investment & Expenditure

Individuals choose to invest in various investment options and incur expenditures in order to reduce their net taxable income (only if the taxpayer has opted for the old tax regime). Provisions in the Income Tax Act 1961, also provide for various deductions under specified sections. Deductions can be claimed against Investments, Allowances, etc., which can reduce the taxable amount of an individual. In order to claim deductions, tax-saving investment and expenditure proofs have to be submitted while filing for IT returns. Receipts of the life insurance premium paid, receipt of investment in Employee Provident Fund(EPF) & Public Provident Fund (PPF), receipt of investment in Equity Linked Savings Scheme (ELSS), receipt of medical insurance, fixed deposit receipt, receipt of donation paid, receipt of tuition fee paid, statement of mutual fund, life insurance, etc., are needed to be there with the taxpayer at the time of filing for IT returns.

8. Home Loan Settlement

In case any individual has taken a loan from the bank or any other financial institution and wants to claim a deduction for the interest paid for the loan, he/she must have the loan statement that contains a breakup of the loan principal and the interest paid by the individual. Loan statement works as proof while filing IT Returns.

9. Capital Gain Details

Profit earned from the sale of capital assets is known as Capital Gain. Property, Plant and Equipment are all examples of capital assets. Gain on the sale of capital assets is categorised as an income, so they are liable for taxation. Both Short-term Capital Gain and Long-term Capital Gain should be disclosed at the time of filing the IT return. Purchase and Sale deed of transfer of any property, along with the stamp valuation details, receipt of transfer expenses incurred, purchase deed in case of reinvestment, etc., needs to be submitted as proof of capital gain and for claiming deductions (if any).

10. Rental Income

Income earned from renting a property is also liable for taxation and should be reported in the ITR form. On the other hand, deductions can be claimed for the amount paid as rent by any individual. Rent receipts of the amount paid as rent, along with the PAN details of the landlord and rent agreement need to be presented to claim deduction.

11. Foreign Income

Documents related to income earned in a foreign country or from a foreign country during a job deployment need to be furnished at the time of filing ITR. The benefit of the tax credit can be claimed on foreign income under different sections if valid proof is presented at the time of filing ITR.

12. Dividend Income

Income earned as dividends from investments in shares and mutual funds should also be reported while filing IT returns. A broker statement or Demat account summary needs to be submitted as proof.