Documents required for filing Income Tax Return

In this article, we will discuss the types of income on which tax is levied. We will also list out the documents required for filing income tax.

The basic income tax slabs for different age groups

As per the Income Tax Act, any person who is less than 60 years old and has a yearly salary of more than two lac fifty thousand rupees has to file income tax. Similarly, for a person between 60 and 80 years of age, the yearly slab starts from three lac rupees and for an 80 above person, the yearly slab starts from five lac rupees.

From this, we can see that every individual has to file for income tax if he or she crosses this minimum yearly salary slab.

Who should file income tax?

Income tax Act of 1961 clearly defines a taxable person as:

1. An Individual.
2. A Hindu Undivided Family (HUF).
3. A Company.
4. A Firm.
5. An association irrespective of whether it is yet incorporated or not.
6. A local authority and every artificial juridical person not falling within any of the preceding sub-clauses.
7. Association of persons or local authority or artificial juridical persons.

Types of income tax

Now, let us understand the types of income on which taxes are levied. According to the Income Tax Act of 1961, as many as five headers come under this.

1. Income from Salary –

• • As the name suggests, it is nothing but the yearly package that you receive from your company or employer for services rendered.

2. Income from house property –

• • If you rent a part of your house to a shop or a garage, or an office or some family to stay in then all those income breakups are to be calculated hear.

3. Income from business and profession –

• • If you are doing some kind of trade and commerce, such as brokers or import and export, then you have to add those incomes in business part. Similarly, if you are a professional, and you earn by directly rendering services such as a doctor or a chartered accountant or an engineer then you have to add those breakups in the profession segment.

4. Income from Capital Gains –

• • It is nothing but income from the sale of some capital assets like financial investment or real estate investment.

5. Income from other sources –

• • Other sources of income such as income from an interest rate from a savings account, interest rate from a fixed deposit, interest rate from a recurring deposit, dividends earned for holding a stock are added here.

Documents required for filing Income tax return

You will require all the necessary documents to support the income claims you are making in your income from salary, income from house property, income from business and profession, income from capital gains and income from other sources. We will discuss them in brief. Note that irrespective of the means of income, you would require these documents:

1. A copy of your PAN card.
2. A copy of your AADHAR card.
3. A copy of the yearly bank statement with clearly mentioned capital gains. In technical terms, it is also called a TDS certificate statement. If you don’t have such a statement, contact your branch manager and get a copy. Note that you have to provide bank statements of all the banks with whom you have an account.
4. Your income tax login id and password.

As promised before, now, we will dig deep into it and let you know the list of documents necessary for filing an income tax return under each income category.

Income specific documents required for filing income tax return

As per the source of income select, the income tax department has many forms like ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4, ITR-4S (Sugam). Choosing the right option is required to fill your details correctly. We recommend you to take professional help while choosing your income tax form because choosing the wrong form will inevitably lead you to incorrectly fill up the form which can lead you towards a penalty.

In case, the person is an individual or HUF person, he must keep his identity proof, address proof, and birth certificate. On the other hand, for an association, documents like address proof and board resolution copy, and registration copy are mandatory.

Documents required for a salaried individual

In order to claim a tax deduction, a person has to apply for a TAN (Tax Deduction and Collection Account Number). Along with Form 49B, the person has to submit the following documents:

Salary Income :          

• Form 16

Capital Gains Income :

• Purchase and Sale deeds of immovable property
• Contract note/Demat account statement for securities sale/purchase
• Purchase and sale proof/receipts of all applicable capital assets.
• Broker’s ledger statement.
• Demat account statement.

Income from other Sources:

• Interest or TDS certificate for bank FD interest
• Bank account/bank passbook statement for interest earned from savings account
• Dividend warrant in case of dividend income
• Rent agreement and TDS certificate (if applicable)
• Any other documentary proof (as applicable)

Income from house property:

• Rent agreement of Shop/House/office etc.
• Housing loan interest certificate.

Income from Business or Profession:

• Balance Sheet
• Audit records (if applicable/mandatory)
• Income Tax payment (self- assessment tax/advance tax) challan copy.
• Sale bills.
• Purchase bills.
• Expense Voucher.
• Bank Statements.
• Stock register.
• Fixed Assets Register.
• Fixed Asset Accounts.
• Tax audit report.
• TDS Returns & payment challan.
• GST Challan & returns.
• Income Tax payment challan copy.

Tax Saving Investments:

• Receipt of life insurance premium paid
• Receipt of medical insurance
• Public Provident Fund passbook
• Fixed Deposit receipt
• Home loan repayment certificate/receipt
• Donation paid receipt
• Tuition fee paid receipt
• Mutual Fund Consolidated Account Statement (CAS)
• Education loan repayment certificate.
• Bank pass book for interest & Dividend income.
• FD Interest certificate from bank

HRA Exemption:         

• Rent paid receipt

Details of Investment for 80C/80D/80G Deduction

• Statement of LIC Premium paid.
• Tax saver FD receipt.
• Tuition fees payment receipt.
• NSC/KVP receipt.
• Medical insurance premium payment receipt.
• Donation receipt.
• PPF Passbook.
• Housing loan interest certificate.

Tax deduction on Medical Expenses :

• Bills of medical expenses incurred

Leave Travel Allowance:

• Applicable tickets and ticket purchase receipts

Note that there are as many as three types of Form 16. They are Form 16A, Form 16B, and Form 16C. Form 16A highlights the TDS deduction for income other than salary. Note that these could be returns on investments on fixed deposits, mutual funds, gold, bonds, and so on. On the other hand, Form 16B is a TDS certificate which reflects that the amount deducted as TDS on the property by the buyer has been deposited with the Income Tax Department and Form 16C is the TDS certificate that reflects the amount of TDS on rent. This applies to individuals and HUFs who pay a rent of more than INR 50000 per month.

The tax payer must understand that the income tax return you file is an ‘annexure less’ return which means there is no need of attaching any documents or proofs. The Income Tax Act asks for collecting certificates and proofs in order to claim deductions which makes it ambiguous for the taxpayer, as to whom they must handover those certificates and documents and legitimate proofs. In short, the tax payers have to preserve those certificates and receipts for future references and need not attach or send it to anyone and in case an assessing officer (AO) sends a notice asking for documents, the taxpayer has to submit the proof to the AO.

Documents required for charitable or religious trust

If it is a charitable or religious trust, then it has to fill up Form 10A and keep these documents in hand:

1. Certified true copy of trust deed
2. Documents evidencing the creation of trust
3. Copy of accounts for the previous 3 years immediately preceding the year in which application is made.

Documents required to claim deduction if the individual is not salaried

If an individual is not a salaried person, then also, he can claim deductions while filing for income tax. In such a scenario, the person has to provide details of the documents listed below to claim deductions under Section 80C.

1. Life Insurance premium receipts.
2. Public provident fund contribution receipts.
3. Receipt of subscription to ELSS mutual funds.
4. Receipt of provident fund contribution.
5. Senior Citizen Savings Scheme receipts.
6. Receipt of 5 year Bank FDs.
7. Receipt of tuition fees.
8. Receipt of investment in the National Pension Scheme.
9. Receipt of contribution made to ULIPs.
10. Receipt of principal repayment on your home loan.

Not only under 80C, but the person can also claim deductions under section 80D of the Income Tax Act. Here, an individual who is not salaried can claim for a deduction on health insurance premiums for a maximum of up to INR 25000 year. And if the tax payer is paying the health insurance premium for his or her parents, then he or she can claim an additional INR 25000 (INR 30000 if they are senior citizen).

Dates to remember for fiscal year 2019-2020

In general, 31st July is the last date to file your Income Tax Returns in any given financial year otherwise you have to pay a penalty fee for late filing. Due to coronavirus scenario, in the current year, our financial minister granted us an extension till 30^th November 2020 for fiscal year 2019-2020.

How to link your Aadhar number with PAN?

1. The process of linking Aadhaar and PAN is very simple. It is a paperless process. To link your PAN with your Aadhaar follow these steps:
2. Go to Income Tax e-filing portal by clicking here.
3. If you have previously registered log in. If you are a new user, register on it. Your PAN will be your user id. Provide other details like date of birth and password and log in to your account.
4. Automatically, as soon as you log in to your account, a pop up window will appear prompting you to link your PAN with Aadhaar. Simply click on it. However, if the pop up does not appear, then go to ‘Menu bar’ -> ‘Profile Settings’ -> ‘Link Aadhaar’.
5. Verify the PAN details with your Aadhaar details on screen. You must note that if there is a mismatch then you have to correct the error of the document furnishing wrong quotes first.
6. Simply click on “link now” if the documents match. As soon as you do this, you will get a pop-up message that says “Your Aadhaar has been successfully linked to your PAN”.
7. You can also do the same through https://www.utiitsl.com/ or https://www.egov-nsdl.co.in/ in case you find it difficult to access this website. The process is same.

Conclusion

From the above information, it is clear that different persons earning different types of income have to maintain various documents and it can be quite messy if you try to do it yourself and you don’t have an accounting background. Therefore, we recommend you to take professional help. The process of filing your Income Tax Returns in India needs some preparation so we would recommend you to start preparing for it from now on. Note that all your hard work of compiling all documents will be nullified if you have not yet linked your Aadhaar number with PAN number. It is a new amendment over the existing Income Tax Act. It is applicable from accounting year 2019-20. We recommend you to start with the very first step of filing income tax return, which is by linking Aadhaar id and PAN number.

Also, do not hide out any investment, loan, insurance premiums, other sources of income to your financial manager or accountant, because, that way, you might be missing on a mouthwatering deduction for the sake of curtailing some extra income or loss.

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