It is mandatory to pay income tax to the Government of India according to your tax bracket unless your annual income is below Rs.2,50,000. With the assessment year of 2018-19 approaching, the last date for filing income tax returns for the year 2017-18 draws nearer. It is important to file your income tax return as it is a documented evidence of your income. Depending on your income slab and the source of income, your tax liability will vary. However, to file your income tax return form, you need to submit certain necessary documents along with your PAN card and Aadhaar card for verification purpose.
To provide your salary break-up and income from all the sources while filing IT returns, you should keep these 5 documents handy.
- TDS Forms
Form 16 is a TDS (Tax Deducted at Source) certificate issued by your employer if you are salaried. It is considered as one of the most important documents while filing ITR as it has a complete detail of your gross remuneration and the TDS deducted from it. Even if TDS is not deducted at source, you can ask your employer to issue it to give a complete break-up of your salary.
Apart from this, if you have income from other sources over specified limit, you have to submit Form 16A, Form 16B and Form 16C. When you have income other than salary and TDS is deducted on it, you will have to submit Form 16A. If you have given any property on rent, you need to ask your tenant to give Form 16C with details of TDS deducted on rent received. Also, if you have sold any property during the year, the buyer has to furnish Form 16B with TDS details.
- Bank Interest Certificate
Banks and post offices issue interest certificates that contain details of interest received from savings bank account, fixed deposits, and recurring deposits. This certificate will help to know the exact amount of interest earned and determine if it crosses the taxable limit. In case you do not have an interest certificate, you should update your passbook regularly to get exact details of the interest credited to your account.
- Home Loan Statement
To finance your home, you may have availed a home loan. For purpose of filing your returns, you have to collect a home loan statement from your lender to get a detailed break-up of principal and interest repayment and enjoy the home loan tax benefit. You can claim a deduction for the principal payment under Section 80C and for the interest payment under Section 24 to reduce your tax liability.
- Tax-saving Investments
Under the provisions of Section 80C, 80CC, and 80CCD, you can lower your income tax liability with the help of tax-saving investments and expenditures. You can claim a deduction up to Rs.1,50,000 during the year under these 3 sections. The most common tax-saving investments and expenses are Public Provident Fund, Employee Provident Fund, Life insurance, National Pension Scheme, and investments in mutual fund’s ELSS scheme. Apart from this, you can claim deductions for home loan principal repayment, and tuition fees paid for your children.
- Deduction Certificates
Apart from the above mentioned tax-saving expenditures, you can also claim deductions under Section 80D and 80E. Under Section 80D, any health insurance premium paid for the concerned financial year is eligible for deduction up to Rs.25,000 or Rs.50,000 in case of senior citizens. Also, if you have paid interest against the education loan, you can claim deduction on it under Section 80E to reduce your tax liability.
Now that you know what documents are necessary to submit your IT returns, you should keep them ready to avoid delays and penalties. Further, keep record of every big transaction and payment to make the most of various benefits and deductions.