Income tax is a direct tax paid to the government by Indian citizens based on their tax liabilities for each fiscal year. According to the Income Tax Act of 1961, it is required to pay income tax depending on the tax bracket into which one’s income falls. The Income Tax Return (ITR) is essential since it serves as written confirmation of income. However, every taxpayer who is subject to income tax is obliged to provide specific income tax paperwork.
Income Tax Documents Required to Claim Deductions for Various Expenses
There are a variety of deductions that may be used to lower your tax obligation. You may claim the deductions by submitting income tax papers relating to tax-saving investments you have made or qualified expenditures you have incurred.
The following income tax paperwork should be kept on hand in order to claim certain costs as deductions:
- Income tax records pertaining to your Provident Fund contribution
- Receipts for life insurance premium payments
- Payment of stamp duty and registration fees
- Home loan principal repayment
- Proof of investment in the Equity Linked Savings Scheme must be used as one of the income tax papers
- Contribution to the National Pension Scheme on one’s own dime (NPS)
Income Tax Documents Required for ITR Filing
When completing the ITR, the Income Tax Department requests that taxpayers give a breakdown of their gross wage income and income generated from other sources. It is for this reason that both individuals and tax specialists try to gather their income tax records on time.
In general, it is a good idea to maintain all of the income tax paperwork needed for ITR available.
Here is a list of income tax papers that are necessary for e-filing an income tax return:
1. PAN Card and Aadhar Card
Your Aadhar card and PAN card are two important income tax papers that must be submitted with your ITR. Every Indian taxpayer is required to furnish his/her Aadhar card data while filing ITR under Section 139AA of the Income Tax Act.
2. Form 16
Form 16 is one of the most important income tax paperwork that salaried persons must submit with their ITR. It is a TDS certificate supplied by their employers that provides information about the TDS deducted from their pay.
It is one of the most important income tax papers because of the information it contains, which includes tax deducted from pay, workers’ PAN, employer’s PAN and TAN, and gross salary split.
3. Salary Statements
For salaried taxpayers, the most recent wage slips are part of the income tax documentation necessary for e-filing an income tax return. These slips provide information regarding House Rent Allowance, Transportation Allowances, and other tax-exempt allowances.
4. Postal Service and Bank Interest Certificates
The interest you earn on a savings bank account, a post office savings account, or a Fixed Deposit (FD) is taxed. As a result, you must get interest certificates from the appropriate banks/post offices, which will serve as the income tax papers necessary to submit ITR.
5. Demonstrations of Tax-Advantaged Investing
During fiscal year 2019-20, you may reduce your tax burden by making tax-saving investments under sections 80C, 80CCC, and 80CCD(1). Proofs of investments in Employee Provident Fund (EPF), Public Provident Fund (PPF), and Life Insurance are therefore part of the income tax paperwork required to submit ITR.
The highest deduction you may claim under these provisions with the appropriate income tax documentation is Rs. 1.5 Lakh.
6. Receipts for Health Insurance Premiums
Aside from income tax papers connected to tax-saving investments, health insurance premiums paid during the Fiscal Year 2019-20 are deductible under Section 80D of the Income Tax Act.
The highest deduction available for utilizing insurance receipts as income tax papers is Rs. 25,000 for yourself, your spouse, and your children. It rises to Rs. 50,000 if you additionally pay the health insurance pay for your parents under the age of 60.
7. Evidence of Capital Gains
If you have achieved capital gains from mutual funds/equity investments or the sale of a property, you must present documentation of these profits as income tax papers for ITR.
The following income tax papers were necessary for the calculation of capital gains:
a) Purchase/sell agreement for the sale of a home, land, or building
b) Statements from the mutual fund companies or brokers involved
What exactly is Form 26AS?
Form 26AS is one of the most important income tax paperwork since it contains all of the information about the taxes that have been submitted against your PAN number. It is a certificate issued under section 203 of the Income Tax Act that covers TDS deducted from income under the heading ‘salary.’
Simply log in to your account to add Form 26AS to your stack of income tax paperwork.
Other Investment-Related Documents Needed for ITR Filing
Aside from the income tax paperwork listed above, the following investment documents are necessary to submit an ITR:
- a) Interest paid on a home loan for a self-occupied home (eligible for tax-saving up to Rs. 2,00,000)
- b) Receipts for education loan interest payments to be used in conjunction with other income tax records
- c) Stock trading report
The Importance of Selecting the Correct ITR Form
The ITR form is a document that people use to submit information about their income and taxes owed. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7 are the seven distinct ITR forms produced by the Income Tax Department for varied income tax needs.
It is critical to choose the correct form when submitting different income tax papers necessary for ITR. Even if you have filed all of the needed income tax paperwork, your return may be denied if you use the incorrect form.
According to income tax regulations, it is obligatory to submit ITR in India together with the relevant income tax papers if a taxpayer’s gross yearly income is as follows:
– 2.5 lakhs for individuals under the age of 60
– 3 lakhs for those between the ages of 60 and 80.
– 5 lakhs for those above the age of 80
As a result, before you begin gathering income tax records to submit an ITR, you should be familiar with the various ITR forms.
The Importance of Connecting PAN to Aadhar
Every Indian taxpayer is required to connect their PAN with Aadhar as part of their income tax obligations. If he or she fails to do so, his or her ITR will not be processed under Section 143(I) of the Income Tax Act. This will occur regardless of whether the person has supplied the necessary income tax paperwork to file the ITR.
The government also takes the effort to combat black money by requesting Aadhar-PAN connections along with different income tax forms.
Those who have yet to connect their PAN with Aadhar should be aware that the Aadhar-PAN linking deadline is June 30, 2020. Otherwise, the PAN card, which is one of the most important income tax records, may become inoperative.
READ ALSO: Tax Refund: Know More
Frequently Asked Questions About Income Tax Documents
- Is it required to include income tax records when submitting an ITR?
- The ITR you submit is an annexure-free return, which means it must be accompanied by no income tax documentation. According to the Income Tax Act, you must save all income tax records for future reference, especially those in which you are required by an Assessing Officer to give evidence or explanation concerning transactions included in the ITR.
- Will I get a tax refund? What if I have paid more tax than I owe?
- It is common for taxpayers to pay more tax than they are obligated to pay. It might be due to errors made when calculating taxes using multiple income tax papers. Similarly, neglecting to furnish certain income tax paperwork to the employer results in tax refunds.
You may apply for a refund of excess tax paid online, and the money will be transferred to the connected bank account using the ECS transfer function.
- What precautions should I take before submitting an ITR?
- When submitting an ITR, you should take the following precautions:
– Keep all of your income tax records ready when calculating your tax due.
– File the ITR before the deadline.
– To prevent any discrepancies, download Form 26AS and examine the actual TDS deducted/paid.
– Determine the right ITR form to be submitted.
– While filing the ITR, carefully examine the income tax paperwork.
- Will there be any implications if I do not file my ITR?
- If you fail to submit an ITR in accordance with your tax responsibility, you may face a penalty and prosecution under the terms of the Income Tax Act. As a result, it is essential to gather all income tax records and submit the ITR on time.
- I previously lost one of my income tax forms. Is it legal for me to submit an amended return?
- You may submit an amended return at any point throughout the fiscal year. Before updating the return, double-check the relevant income tax records.