Here is the list of documents that you must collect and keep handy when starting the process of ITR filing.
1. PAN and Aadhaar
PAN is an important document when filing an income tax return. To login or register on the income tax e-filing portal, taxpayers must mention their PAN or Aadhaar. Any tax deducted or collected from the taxpayer during the year is deposited on the basis of PAN. Correct PAN must be mentioned in the ITR form while filing the tax return. When the ITR form is filed online via one’s account on the e-filing website, the PAN will automatically reflect in the form.
Apart from PAN, taxpayers must also mention their Aadhaar number in the ITR form. This is mandatory. Usually, Aadhaar number automatically reflects in the ITR form if PAN is linked to it. However, it is recommended that the ITR filer checks that the correct number has been quoted.
Also Read: Which income tax return form applies to your income?
An individual can file ITR if PAN is not linked with Aadhaar . However, the access to income tax e-filing portal will be limited, according to income tax portal. 2. Form-16 from your employer
Form 16 is an important document for salaried individuals to file their ITR. It is a TDS certificate issued to employees by employers. It provides information about the total tax deducted from the employee’s salary and deposited against his/her PAN during the financial year, the total salary income paid, and the deductions and exemptions claimed by the employee as per the chosen tax regime. Employers have to issue employees Form 16 by June 15.
Also Read: What is the due date to receive Form 16?
Form 16 issued to an employee must have two parts – Part A and Part B. Both the parts must have the TRACES logo on it.
“Income from Salary” information, which is pre-filled in the online ITR form on the income tax department’s e-filing website, is taken from Part B of Form 16.
3. Form 16A from banks and other TDS certificates
Tax can be deducted on other income such as interest earned from fixed deposits, recurring deposits, dividends, etc. If the tax has been deducted during the fiscal year for which tax return is being filed, then banks, companies and other financial institutions must issue Form 16A. It is a TDS certificate issued to an individual certifying the tax deducted on the interest/dividend etc paid to the individual.
Also Read: Why salaried should wait till June 15 to file ITR
Similarly, tenants have to issue Form 16C to landlords if tax has been deducted from rent. Current income tax laws require tenants to deduct tax at source (TDS) from rent if the monthly rent is Rs 50,000 or more in a fiscal year.
Form 16B is a TDS certificate issued by the buyer to a seller who has sold a house, land or property during the financial year. The buyer will deduct tax from the money he pays to the seller if the property is sold for more than Rs 50 lakh.
4. Interest certificates
An individual can receive interest income from various sources, apart from banks. These include interest earned from investments in post office schemes, RBI floating rate bonds, sovereign gold bonds, etc. It is important to collect interest certificates for interest earned from various sources to report the correct income in the ITR form.
Normally, if tax has been deducted at source and TDS certificate is issued then the amount of interest paid and the TDS on it are both mentioned in the TDS certificate itself. However, there may be interest income on which TDS has not been deducted such as interest from bonds where the interest amount is below the threshold above which TDS becomes applicable. Therefore, interest certificates for such interest income are needed.
Taxpayers should also get the passbooks of all bank accounts updated to reflect all credits in their bank accounts during the financial year for which ITR is to be filed. By checking the updated passbooks, one can know the various interest incomes and their respective sources.
An individual paying a loan EMI either on a home loan or education loan should collect an interest certificate (for interest paid on the loan) from the lending institution. This certificate is needed to claim deductions on the interest paid on these loans if the taxpayer has chosen the old tax regime.
5. Annual Information Statement (AIS)
Taxpayers should download their AIS from the income tax e-filing portal. The statement has information about most incomes of an individual in the relevant financial year. This includes interest received on balances in savings accounts, capital gains from selling shares and mutual funds, salary received from employer and dividend received, among others.
The income information in the AIS must match with that in documents such as Form 16, Form 16A, interest certificates and other documents having income information. This is because the income tax department will calculate taxable income and tax liability based on the information available in the AIS. Hence, it is important to ensure there is no mismatch in the information.
6. Form 26AS
This is a tax passbook showing tax deducted from various incomes and deposited against the taxpayer’s PAN during the financial year. If tax is collected (TCS) from the taxpayer on expenses such as buying a car or a foreign tour, such tax will also be reflected in Form 26AS. The total amount of tax deposited against the taxpayer’s PAN, as shown in Form 26AS, must match with the information in the TDS certificates. Any mismatch will create issues for taxpayers as the income tax department will allow tax credit only on the amount reflecting in Form 26AS and not in the TDS certificates.
7. Capital gains
A taxpayer is required to report income from capital gains in the ITR form. An individual can earn capital gains by selling land, building, house, equity shares, equity mutual funds, gold, etc.
Taxpayers can get the capital gains/loss statements for gains/loss arising from sale of equity shares and equity mutual funds from brokerages and mutual fund registrars, respectively. In case of capital gains from sale of property, one would require the purchase deed and sale deed of the property.
Taxpayers may suffer losses, instead of earning gains, while selling capital assets. Losses from capital assets must also be reported in the ITR form. Capital losses (short-term or long-term) can be carried forward for 8 financial years. These losses can be set-off against future capital gains, thereby helping taxpayers pay lower income tax in future.
8. Tax saving investment and expenditure proofs
While filing ITR this year, individuals wanting to file return under old tax regime must specifically opt for it. This is because the new tax regime is the default tax regime. Only an individual filing ITR under the old tax regime can claim various deductions from income and exemption from tax for specified incomes.exemptions. These include Section 80C deduction up to Rs 1.5 lakh; Section 80D deduction up to Rs 25,000/Rs 50,000; NPS investment up to Rs 50,000 under Section 80CCD(1B); tax exemption on house rent allowance and leave travel allowance, etc.
An individual must keep the relevant documents handy as proofs to claim the deductions. For instance, Section 80C deduction can be claimed if an individual has invested in ELSS mutual funds, EPF, PPF, or paid home loan EMI, children’s tuition fees, etc. Section 80D deduction is available on payment of health insurance premium. To claim HRA exemption, keep the rent agreement andor rent receipts handy.
If taxpayers submit proof to their employers of these deductions and exemptions, then Part B of Form 16 will reflect the tax breaks so claimed.
9. Foreign income and unlisted shares
Many individuals have started directly investing in foreign shares. If there are any capital gains or dividends from foreign shares, such information must be reported in the ITR. It is mandatory for resident individuals to report foreign assets in the ITR.
Filing an income tax return is mandatory irrespective of the total taxable income if the individual has foreign assets or has a signing authority in a foreign bank account.
If an individual holds unlisted shares, those details should also be reported in the ITR form. Documents proving the amount and source of foreign income should be collected as proofs and also to source the information.
10. Bank account
A taxpayer must report all the bank accounts held by him/her during the FY 2023-24. Reporting of bank accounts is mandatory irrespective of whether there is income tax refund or not. While reporting bank accounts, mention the names of the banks, account numbers, account type and IFSC codes. Keep these details of all your bank accounts handy before you start the ITR filing process.