8 Jun 2022 5:59 AM GMT
Income Tax Return filing is important and a must for taxpayers, even if your tax liability is nil or your income is below the tax slab. (Photo credit: Pixabay)
New Delhi: Income Tax Return or ITR filing is important and a must for taxpayers, even if your tax liability is nil or your income is below the tax slab. For filing the ITR, there are various forms that one needs to fill. The Income Tax Department has been working to make the process of submitting an ITR easier. This is done by offering pre-filled ITR forms. Individuals can file ITRs either online (without downloading any forms or utilities) or offline (by downloading the forms and then submitting them to the new income tax system). In this article, we will tell you about the documents you should have while filing your ITR.
PAN card
If you’re filing an income tax return, you will first and foremost need a PAN card. The name on your PAN card must match the name on your ITR. PAN is also necessary for TDS deductions and should be linked to your bank account for direct refund credit (if any). The PAN number is issued by the Income Tax Department.
Aadhaar number
An Aadhaar number is a unique identification number issued by the government of India. An individual is required to quote his or her Aadhaar number when filing an ITR under section 139AA of the Income Tax Act, 1961. If you don’t yet have an Aadhaar number but have applied for one, you’ll need to fill out the ITR form using your enrolment ID.
Form 16
A TDS certificate is a document produced by your company that outlines the salary paid, taxes deducted and deposits made during the fiscal year. If an employer deducts taxes, the company must issue Form 16 to the employee. Employers have to submit Form 16 to the IT department by June 15. Form 16 consists of Part A and Part B and both can be downloaded from the TDS Reconciliation Analysis and Correction Enabling System (TRACES) portal.
Form 16A and other TDS certificates
Individuals must also collect any other TDS certificates that are appropriate to them, in addition to Form 16. The bank would deduct tax on the interest generated on fixed deposits in FY 2021-22 if it surpasses Rs 40,000 or Rs 50,000 (for senior citizens). In addition, the bank must issue Form 16A to the individual for the tax deducted. If the tax deducted on dividends paid during FY 2021-22 exceeds Rs 5,000, mutual funds and businesses will issue you Form 16A. Similarly, tenants who pay a monthly rent of Rs 50,000 or more should get Form 16C (TDS certificate) from their landlord. Tenants who pay a monthly rent of Rs 50,000 or more must deduct tax from their annual rent. Those who sold land or property in FY 2021-22 should urge their buyer to provide Form 16B to claim the tax deduction. If the property is sold for more than Rs 50 lakh, TDS is required.
Other interest income and certificates
Individuals must break out their interest income from various sources, such as savings accounts and fixed deposits, on ITR forms. This necessitates obtaining interest certificates from banks, post offices, and other financial organisations, as well as reporting accurate income information in ITRs and claiming tax deductions and exemptions. If an interest certificate is not accessible, the bank passbook/s must be updated and checked.
Individuals can claim a deduction of Rs 10,000 for interest received on savings accounts under section 80TTA. The interest generated on fixed deposits, recurring deposits, RBI taxable bonds, and other similar instruments is completely taxable. As a result, the right amount must be reported in the ITR and taxes must be paid accordingly. Even though PPF interest is tax-free, you must disclose it.
Individuals who paid their EMI on a home loan or an education loan during FY 2021-22 should obtain a repayment certificate from their bank or financial institution to claim tax exemptions and deductions. Individuals can claim a deduction for interest paid on home loan EMIs up to Rs 2 lakh under section 24. On the main amount of a house loan repaid throughout the financial year, Section 80C is also available.
Annual Report on Information
The Annual Information Statement was launched by the Income Tax Department in November 2021. This statement offers information on all of an individual’s financial transactions throughout a given fiscal year. The document also includes information about the taxes that have been deposited with the government using your PAN. Individuals must download and double-check financial transactions from AIS to ensure that all incomes stated in the statement are reported in the ITR form that applies to them.
Form 26AS
Individuals must use the new income tax portal to get Form 26AS. Form 26AS is a tax passbook that specifies the taxes deducted and deposited with the government against your PAN. Individuals should compare the information on Form 26AS to the information on TDS certificates and interest certificates. This is because it’s possible that the TDS deducted isn’t reflected in your Form 26AS due to a variety of factors such as incorrect PAN, incorrect assessment year, and so on. If the tax deducted/deposited does not appear on your Form 26AS, you will not be able to claim a credit.
Investments that save money on taxes, as well as expenditure proofs
To claim a deduction when filing an ITR, it is necessary to gather tax-savings investment and spending documentation. It’s worth noting that if you choose the old tax system while filing your ITR, you can claim tax-saving investments and expenses. To avoid greater TDS on their wage, employees usually declare and submit all tax-saving documents to their employers. Part B of Form 16 lists the proofs that were filed. The tax department pre-fills the ITR form using information from part B of Form 16.
If you have forgotten to declare any tax-saving proof, you can claim it while filing your ITR.
Gains on the selling of real estate, stocks and mutual funds
Capital gains from the sale of real estate, stocks, and mutual funds must be reported on the ITR. According to the notified forms, a person with capital gains cannot file a tax return using ITR-1; instead, he or she must use ITR-2/ITR-3, if appropriate. To calculate capital gains (long-term or short-term) on the sale of a house, land, or building, you’ll need the property’s purchase and sale deeds. This year’s ITR forms require the taxpayer to include different details on the sale of a building.
Investments in unlisted stocks are described in detail
If you held unlisted shares during the fiscal year 2021-22, you must provide that information on your ITR. In this instance, keep in mind that you won’t be able to file your tax return using the ITR-1 form; instead, you’ll need to utilise the ITR-2 form.
Details of your bank account
It is required that you supply information about your bank account(s) during FY 2021-22. Even if you closed your account during the fiscal year, you must disclose it. Your bank name, account number, account type, and IFS code must all be included. To get an income tax refund, the bank account must also be pre-validated.
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