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Essentials For Filing Income Tax Returns

The deadline to file your returns is 6th July, but before filing your ITR make sure you have all information ready to file it. Even if your CA is doing it for you should keep all these things handy for him/her. These documents help to compute your taxable income and ensure smooth filing of your returns: 

#1. PAN & Aadhar: PAN is necessary to pay taxes. If you’re already paying taxes then your PAN will be registered with the IT department. So keep a copy of PAN while filing ITR. Also, now since it is compulsory to link PAN with Aadhar keep a copy of your Aadhar card as well.

#2. Procure Form 16 from employer: If you’re a salaried professionals collect this form from your employer at the end of the financial year i.e. on 31st March. It is the tax deducted at source (TDS) certificate on salary income. It’s divided into two parts:

  • Part A: Details such as name and address of employer & employee, PAN and TAN details, period of employment, TDS deducted & deposited with the government are in this part.
  • Part B: Break up of your salary, other incomes, deductions allowed, exemptions, allowances and tax payable are included in this part. 

#3. Collect Form 16A: If tax has been deducted at source from any non-salary income then details of it will be in Form 16A which is also called as a TDS certificate. It is issued by banks, companies or other financial institutions that deducts the tax. For example: For TDS on interest income from bank FD, the bank will issue Form 16A. Details such as name and address of deductor/deductee, PAN/TAN details, challan details of TDS deposited, income you have earned and the TDS deposited on such income will all be included in this form which is usually issued quarterly.

#4. Verify details of TDS in Form 26AS: Once you get Form 16 and Form 16A, to avoid any errors, cross check details on these forms (TDS paid to the government on your behalf by your employer, bank, self or any other party) in Form 26AS. 

You can view Form 26AS through net banking under an option called “Form 26 AS”/ “Tax Credit” / “TRACES” / “TDS Details” or through Income Tax Website . You’ve got to click on ‘View your Form 26AS’. 

#5. Collect bank statements/passbook/summary of all bank accounts: Collect & keep a summary of all your bank transactions during the financial year including income earned, investments made and expenses incurred.

#6. Keep a record of your property details: Gather information and record documents of any property you’ve purchased or sold during the year along with a copy of any home loans that you’ve taken to buy the property. 

#7. Gather your interest certificates: If you’ve taken a home loan the interest payments are eligible for tax exemptions so keep copies of interest certificate issued by banks on these loans. Keep a copy of interest certificate on education loans as well. Along with this keep a copy of any other interest certificates on bonds, bank accounts, mutual funds etc.

#8. Store all broker contract notes: If you’ve bought equity shares then keep copies of the broker contract notes and collect capital gains statements of mutual fund units that you’ve sold. Usually fund houses send them at the end of the financial year but if they don’t, then you can use brokerage receipts to calculate the gains.

#9. Gather investment details of tax saving investments: Keep proofs of all investments made under Section 80 or any other investments that you’re using for tax deductions.

#10. Keep a copy of tax payment challan: Keep proof of any advance tax paid by you

#11. Once all documents are ready, know the ITR form applicable to you:

ITR 1: This is for those whose income is from salary, pension, one house property and other sources of income excluding lottery and horse races. It isn’t applicable for those whose total income exceeds Rs 50 lakhs, have foreign assets or agricultural income more than Rs. 5,000. 

ITR 2: This is for those individuals and HUF’s who gets income from any source other than business or profession. This includes income from salary/pension, income from house property, income from capital gains, income from other sources (including winnings from lottery and income from horse race ), income of a person as a partner in the firm, foreign assets/foreign income and agricultural income more than Rs. 5,000.

Even another person’s income such as one’s spouse, child, etc. is to be clubbed with this and filed using this form.

ITR 3: This is for those individuals and HUFs who get income from business. They can also include their income from house property, salary/pension and income from other sources in this form.

ITR 4:  This is for those individuals and HUFs who get income from a business or profession and have opted for the presumptive income scheme as per the Income Tax Act.  As per this scheme small tax payers can calculate tax on presumptive basis rather than actual basis so that they don’t have to constantly maintain their books of accounts. But if their turnover exceeds Rs. 2 crores they need to fill ITR-3.

ITRs 5, 6, 7 aren’t applicable to you as they are mostly for Trusts, Companies and partnership firms.

#12. Don’t forger ITR-V: After filing ITR don’t forget to get your Return Form i.e. ITR-V which is a receipt or acknowledgement of your ITR and send it to CPC (that’s the Central Processing Centre of the Tax Department) by post within 120 days of filing the ITR or e-verify it. Don’t forget to keep one copy with you as well. 

Once you’ve got the above things figured you’re good to calculate your taxable income and file them!

4 thoughts on “Essentials For Filing Income Tax Returns”

  1. Pingback: Max Your Tax Game

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