Documents required to file ITR by Salaried Individuals

Income Tax Return

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Every year a salaried individual having income exceeding the maximum limit of income exempted from income tax is required to file an Income Tax return to furnish the details of his/her income in the previous year.  An individual can file the income tax return by himself or through a tax consultant. In this article, we shall discuss about the list of documents and information required to file the income tax return.

Salaried individuals are required to file their return in form ITR 1 and ITR 2. They may also file their income tax return in form ITR 4 when they are carrying out business along with their job. ITR 1, ITR 2 and ITR 4 for the financial year 2018-19 are now available on income tax e-filing website i.e.  https://www.incometaxindiaefiling.gov.in

Here is the list of documents and information required to file the income tax return by salaried individuals:

FORM – 16

Form-16 is a certificate issued by an employer to an employee at the end of the financial year exhibiting the salary paid, its computation and TDS amount deducted and deposited with tax authorities during the year. It is the most important document for any individual drawing income from salary.

Form-16 has two parts: Part-A and Part-B. Part A consists of all the details of the tax deducted by your employer during the year whereas Part B of the form consists of computation of salary which includes your gross salary break-up details such as exempt allowances, perquisites etc

With the help of computation attached with Form 16, individuals can file their income tax return. It is mandatory for your employer to issue Form-16 if your employer has deducted TDS from your salary during the financial year.

If no TDS is deducted from your salary, then you can request your employer to provide you the same. However, in such a case it is not mandatory for your employer to issue Form 16. Your employer may provide you the computation of your salary.

If you have not drawn any income other than salary from your employer in the previous year, than you may just copy paste the information mentioned in the form 16 and file your ITR.  

While receiving Form-16, one must check that the PAN mentioned on it is yours. If there is any discrepancy, then you must inform your employer about the error. Your employer will rectify the errors in Form 16 and issue you a revised form 16.

INTEREST CERTIFICATES

Interest from savings bank/post office account up to INR 10,000 is an exempted income under section 80 TTA. Interest from the fixed deposit is taxable income and should be added in the gross income while filing an income tax return under the head “Income from other sources”.

In case of senior citizens, interest form Recurring Deposit (RD) and Fixed Deposits (FD) up to INR 50,000 is exempted from Income Tax.

Banks deduct TDS on interest income above INR 10,000 and deposit the TDS return with Tax authorities. You may check the TDS deducted and deposited in your name in Form 26 AS by login in your account on the e-filing website.

Any discrepancy or mismatch with the interest income can be easily spotted by the income tax department. Therefore, you must be careful while filling these details in your ITR. You may ask for interest certificates from your bank/post office or calculate the same from your bank statement.

INVESTMENT PROOFS

You may be aware that certain savings and investments are eligible for deduction from gross income under section 80 C. The maximum limit of exemption under section 80 C is INR 1,50,000/- (Rupees One Lakh Fifty Thousand).

The most common and popular savings and investments eligible for section 80 C are:

  • Employees’ Provident Fund (EPF)
  • Public Provident Fund (PPF)
  • Life Insurance premium paid
  • Mutual funds eligible for section 80 C exemptions such as Investments in equity-linked savings schemes (ELSS)
  • Tax saver Fixed deposit (lock in 5 years)
  • National Pension System (NPS) etc.

Apart from investments, there are certain expenditures that are also eligible for tax-benefits under section 80C. Examples of these expenditures include home loan principal repayment, tuition fees paid for your children etc.

There are certain expenses on which you can claim deductions under different sections of the Income-tax Act. Such as deduction under section 80 D which includes premium paid for health insurance. Deduction up to INR 25,000 is allowed under this section on the premium paid for self, spouse and/or children.

If you have paid a premium for the health insurance of your parents, then you can claim an additional deduction of INR 25,000 or INR 50,000, depending on the age of your parents. If your parents’ age is below 60 years, you can claim an additional deduction of INR 25,000. If age is 60 years or above, then you can claim additional deduction of Rs 50,000.

If your senior citizen parents are not covered under any health insurance, then you can claim deduction for the medical expenses incurred under section 80D. You would need the bills of medical expenses as proof to claim this deduction.

Similarly, if you have paid any interest on the education loan, you can claim deduction under section 80E. There is no maximum limit on the amount of interest paid on the education loan. To claim this deduction, you would need an interest paid certificate from the bank from which you have taken the loan.

HOME LOAN STATEMENT

Interest paid on home loan is eligible for deduction under section 24 of the Income Tax Act. The maximum amount one can claim under section 24 is INR 2,00,000 (Rupees Two Lakhs).

If you have taken a home loan from a bank, don’t forget to collect the loan statement for the last financial year. You may also collect principal repayment and Interest certificate from the bank which provides the break-up of how much principal and interest has been repaid by you during the year.  

OTHERS

Other forms :

FORM 16 A: If TDS is deducted on the payments other than salaries such as interest received from fixed deposits, recurring deposits, professional fee etc. over the specified limits as per the current tax laws, the deductor will issue you Form 16A providing you the details of the amount of TDS deducted

FORM 16 B:  If you have sold your property, then the buyer will issue you Form 16B showing the TDS deducted on the amount paid to you.

FORM 16 C: If you are a landlord earning rental income and the tenant deducts TDS while paying the rent, then you should ask your tenant to provide you Form 16C. An individual is required to deduct TDS if the monthly rent is more than INR 50,000.

FORM 26AS

Form 26AS is your consolidated annual tax statement. This is like your tax passbook which has information of all the taxes that have been deposited against your PAN. These include:

a) TDS deducted by your employer;

b) TDS deducted by banks;

c) TDS deducted by any other organisations from payments made to you;

d) Advance taxes deposited by you during the year; and

e) Self-assessment taxes paid by you.

You may check 26 AS anytime by login into your account on the e-filing website, www.incometaxindiaefiling.gov.in. Once logged in, click on ‘View 26AS (Tax Credit)’ under the ‘My Account’ tab. The website will redirect you to the other website i.e. TRACES website to check the form. You may also download form 26 AS from the website.

You should ensure that all the taxes deducted in FY 2018-19 are reflecting against your PAN in Form-26AS. In case of mismatch, you should ask the deductor to rectify the mistake. If the mismatch is not corrected, you won’t be able to claim tax-credit for that TDS deduction.


CAPITAL GAINS

Capital gains are the gains which you earn on selling the capital assets such as Land, building, property, shares etc. As per the law, these gains are also taxable. There are two types of capital gains: 1) Long Term Capital Gain (LTCG) and 2) Short Term Capital Gain (STCG). Taxability of both these gains differ as per the law.

You need to have documentary proofs to compute these gains. For instance, to compute capital gains (long-term or short-term) on sale of house property, land or building one would require the purchase deed and sale deed of the said property. In the case of capital gains accrued on the sale of mutual funds and/or shares, one would require statements from the mutual funds’ company.

While reporting capital gains from sale of property in ITR-2, you will also be required to provide the complete details of the buyer such as name, PAN, address etc.

if you have invested in shares of an unlisted company, then you are required to provide all the details of the same this year while filing ITR-2. Even if the source of your income is salary but you are holding shares of an unlisted company then you are mandatorily required to file ITR-2. You are required to provide complete details of investment along with name and PAN of the company. You will be required to ask the company about their PAN details as required in ITR-2.

You can now start filing your income tax return for FY 2018-19. The income tax department has notified the income tax return (ITR) forms for FY 2018-19. The last date for filing the income tax return is 31st July, 2019.

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