ITR filing: Documents you need to file your income tax return

The tax filing season is knocking at our doors, and you have until July 31 to answer it without paying any penalties. But are you confused as to where to start? Does the stack of documents needed to file your ITR seem too long? Well, we’ve got you covered.

But first off, why do you even need to file an ITR? Simply put, if your annual income is more than Rs 2.5 lakh (if you opt for the old tax regime) or Rs 3 lakh (if you opt for the new tax regime), you are liable to pay taxes and, hence, file an ITR. If you delay filing your ITR, or file it between August 1 and December 31st, you'll have to pay a fine of Rs 5,000. If your annual income is below Rs 5 lakh, then you'll be fined Rs 1,000 for late filing.

But in certain cases, you will also have to file an ITR for the financial year, even if your annual taxable income is below the exemption limit :

• Deposited more than Rs 50 lakh in a savings bank account
• Spent more than Rs 2 lakh on foreign travel
• Incurred expenses of more than Rs 1 lakh in electricity bills
• If your TDS/TCS deducted is more than Rs 25,000

If you’re a salaried employee, here’s a handy list of documents you should collect beforehand before you sit down to file your taxes so that you don't have to scramble for them at the last minute. Firstly, there are your regular documents like PAN and Aadhar card. Also, keep all details of the bank account where you want your IT refund to be credited handy.

It is advisable to also have your Annual Income Statement (AIS) ready, so that you can cross-verify and match all your income details while filing your ITR. AIS as a consolidated financial summary of your year

Time to get in form-16

Up next is Form-16. This gives you a complete overview of your total earned salary and the TDS deducted. This is issued by the employer to their employee. So, if you have switched jobs during the year, or worked with one or more organizations, you'll have to ask both your current and former employer for Form-16.

Additionally, along with Form-16, you should also ask your previous employer to give you a statement of full and final settlement.

Generally, form-16 has two parts-A and B. While part-A carries details of the employer and a summary of salary payments made during the year, part-B is where you will find your salary breakup, and the deductions made from your salary, which include payment of life and health insurance premiums, contributions made to pension fund and more.

Keep rent, travel proofs handy while filing ITR

In case you are claiming tax deductions under HRA (house rent agreement), you will need a notarized rent agreement as proof of rent payment. Generally, rent agreements are made for a period of 11 months. Next, in case you have availed LTA (leave travel allowance), you should have all travel-related bills handy.

You can claim tax exemption on LTA in two ways. One, you can claim exemption on the amount you've actually spent on your travel. Otherwise, within a 4-year time block (2022-2025), you can claim exemption for a maximum of 2 vacations. This is applicable only for domestic travel, and you can claim exemption for your immediate family members as well. But remember, LTA will not cover your accommodation or food-related expenses incurred on the trip.

Up next are your investment proofs and capital gains statement. If you've paid premiums for a life or health insurance policy during the year, or invested in ELSS (equity-linked savings scheme), you need to furnish proofs for the same. You can claim an annual tax deduction of up to Rs 25,000 on premiums paid towards your health insurance policy. In fact, your insurance company will send you a certificate to that effect as well.

As for ELSS, you can claim an annual tax deduction of up to Rs 1,50,000. But you cannot withdraw money from ELSS before 3 years, so invest carefully.

Pay attention to capital gains while filing ITR

If you've redeemed, or sold some of your investments (property, stocks, mutual funds) during the year and earned profit on them, you'll have to pay capital gains tax. But this is applicable only if your capital gains are over Rs 1,00,000 in one financial year.

If you sold a share/mutual fund unit within 12 months of buying it, you'll have to pay a 15% short term capital gains tax. And if you redeemed an investment after 12 months, you'll be charged 10% long term capital gains tax.
That is why it would help to have a capital gains statement handy, which will help you understand how much tax you have to pay.