Our actions today will help us in future situations. Taking the necessary steps and precautions now can help you when tax season rolls around. By keeping all the details and documents required when filing taxes, the stress arising from filing your tax return can be significantly reduced. Let’s review the commonly required documents needed for tax filing.
General Documents For Individual Tax Return Filing
For all taxpayers, the following details are required to be furnished.
- Aadhaar – Number
- PAN – Number
- TDS Certificates – From 16 or Form 26AS
- Bank Account – Account number, IFSC details, bank name, etc.
- Tax payment Challan – For Advance tax payments or in cases of self-assessment
- Original Return/Notice – Original return details if the revised return is being filed or response to notice is filed.
Documents for First Time Filers
The first time an individual files his/her tax return, it can be confusing and stressful. Here is a brief look at all the details/documents that will be needed for income tax filing.
- General documents
- Form 16
- Details of any other income from other sources
- Tax saving investment details
- Details of any other deductions availed
Documents for Salaried Individual
Depending on the tax saving options availed, salaried taxpayers need to furnish the below documents or details to determine and avail of tax deductions.
- Form 16/Salary Certificate – All TDS details are displayed in Form 16 of salaried employees. If TDS is not applicable due to job change mid-year, for example, then the employee can request a salary certificate from his/her employer and submit this with his/her annual tax return.
- Joining Bonus –Details are needed to determine tax liability for the year.
- Salary Arrears – If arrears exist, then taxes due will be higher and form 10E needs to be filled out
- Full and Final Settlement – To calculate the correct amount of TDS and determine tax liability for the year, the full and final settlement statement is needed, in cases of an individual who has switched jobs.
- Pension Certificate – Pension is treated as income, so pension certificate from banker issuing the payment should be kept handy if needed
- Rent Agreement/Receipts – If the employer does not provide HRA, then details will need to be furnished in the tax return when the ITD requests proof.
- Travel Bills – If the employer does not provide LTA, then he/she can get the refund when filing the return.
- Withdrawn PF – Depending on the time of withdrawal it might be taxable or not.
- Gratuity/Leave Encashment – details should be kept to determine whether the amount is taxable or not
- Foreign Salary Slips – if a resident of India, then the details of your income earned abroad is needed.
- Foreign Tax Returns – To claim foreign tax relief, form 67 should be furnished with foreign income proofs such as salary slips and filed foreign tax returns.
Tax Savings Investment Documents
If you have invested in any of the following schemes/policies then the relevant documents such as PAN, receipts, certificates, etc. related to them need to be filed with your tax return.
- Life/Medical Insurance – Details of policy, such as amount, to claim exemption
- Senior Citizen Saving Scheme – Receipts for furnishing proof on the tax return
- ELSS – can be claimed as deduction u/s 80C up to a maximum of Rs 1,50,000
- Sukanya Samriddhi Yojana Scheme – Can be claimed as deduction u/s 80C up to a maximum of Rs 1,50,000
- Tax Saving FD – Can be used as a deduction under section 80C
- Children Tuition Fees Receipts – As per section 80C, payment of children’s tuition fees can be used as a deduction to lower your tax liability.
- PPF Passbook – Details of investment
- Donation Receipts – Receipt for proof of donation along with details of PAN and donor details.
- Repayment Certificate for housing/education loan – Proofs to claim deductions
- Other Investment Receipts – Proofs for any other investments made as per deductions available u/s 80C.
House Property Documents
A popular long-term investment option availed by many taxpayers is investing in property. Documents relating purchase/sale and improvements made can be furnished to avail deductions and reduce a taxpayer’s tax bracket.
- Property Address – Address to claim the deduction.
- Ownership Details – Whether owner or co-owner, details of ownership must be furnished to claim appropriate deductions based on the share of the property.
- Co-owner Details – Details of shares of ownership
- Possession Letter – Interest paid till possession can be claimed as the deduction in five installments. So, the possession letter is necessary to avail deduction
- Interest Certificate for the loan – Principal and interest details from bank to claim deductions
- Rent Agreement – Although the rent earned on property appears in form 16, it is best to submit it with your return, in case of scrutiny notice.
- Municipal Tax Receipts – Receipts should be held in case of scrutiny notice sent by ITD
- Loan Processing Fees & Foreclosure Charges – Finance charge can be deducted as per section 24B
- Details of Pre-construction Interest– Details of interest paid or payable to avail deductions and determine total taxes due.
- Tax Deduction/Form 16A on rent – For future reference
Capital Gains Documents
Declaring short-term and long-term capital gains is mandatory when filing your tax return. Even if you own shares and mutual funds, which are tax exempt, they should be mentioned in your return.
- Sale and Purchase Deed – Property documents and stamp valuation of property.
- Expenses on Transfer – To claim deductions on the transfer of capital asset, records of expenses such as brokerage, commission, transfer fees, etc. should be kept.
- Costs of Improvement – Receipts from improvements made
- Re-investment Purchase Deed – To avail of tax exemption, records showing the re-investment of capital gains in property, bonds etc. must be shown.
- Other Capital Assets – Documents relating to purchase costs, improvement costs etc. to claim deductions.
- Capital Gains Accounts Scheme – Proofs showing gains invested in the specified asset or deposited in account scheme by July 31st.
Documents for Income From Other Sources
The details of all income earned throughout the financial year from any other sources such as investments should be furnished in your annual tax return.
- Form 26AS – Statement that all TDS has been deducted and deposited with the government
- Rent Agreement – As applicable for Plant or Machinery
- Bank passbook/statement – Details of interest from the savings account and FD are required. Other details of bank account number, IFSC code, bank name etc. are also required.
- Interest Certificates – TDS certificate for all FD’s
- Accrued Interest – Interest earned from NSC and other such schemes, for example
- Dividends/warrants – Dividends from Indian company above Rs 10,00,000 is taxed at 10%. Below this amount, it is tax exempt, but documents should still be kept handy
- Agricultural Income – Payment statement, receipts, bank statement showing income earned
- Clubbed Income – Dependent income, which will be declared as own
- Lottery/Prize winnings – Receipts of winnings, as they are taxed at 30%
While the above-mentioned documents are not the complete extensive list of documents that are required when efiling your annual tax return, these are the commonly required documents. Keeping track of these documents, receipts and statements throughout the year will help you when it comes time to file your taxes, as the information needed will be easily available at your fingertips.