Here is the list of documents that you must keep handy while filing your ITR this year.
Form 16 is a TDS certificate issued to you by your employer providing details of the salary paid, taxes deducted and deposited during the financial year. It is mandatory for an employer to issue Form 16 if taxes have been deducted by him/her. The last date of issuing Form 16 by an employer is June 15 (unless extended by the government).
Form 16 consists of two parts: Part A and Part B. Both the parts must be downloaded from the TRACES portal of the income-tax department
The information pre-filled in the ITR forms under the head ‘Income from Salary’ is in sync with the information available in part-B of Form-16
Form 16A and other TDS certificates
Apart from Form 16, individuals must also collect other TDS certificates that are applicable to him/her. If interest earned on fixed deposits in FY 2021-22 exceeds Rs 40,000/Rs 50,000 (for senior citizens), then the bank will deduct tax on it. Further, bank will be required to issue Form 16A to the individual for the tax deducted. Mutual funds and companies will issue you Form 16A for the tax deducted on the dividends paid during FY 2021-22, provided it exceeds Rs 5,000.
Similarly, those receiving monthly rent of Rs 50,000 or more, should get Form 16C (TDS certificate) from their tenant. As per current income tax laws, tenants paying monthly rent of Rs 50,000 or more are required to deduct tax from the annual rent amount paid.
Those who sold land, property during FY 2021-22 should ask their buyer to furnish Form 16B for tax deducted on the amount. TDS is mandatory if the property is sold for more than Rs 50 lakh.
Interest income and other interest certificates
ITR forms ask individuals to provide break-up of the interest income received from different sources such as savings account, fixed deposits, etc.
This makes it important to collect interest certificates from banks, post office and other financial institutions and report correct income details in ITR as well as claim tax deductions and exemptions. If interest certificate is not available, then one must make sure to update and check the bank passbook/s.
Individual can claim deduction of Rs 10,000 under section 80TTA for interest earned on savings account. Interest earned from fixed deposits, recurring deposits, RBI taxable bonds etc. are fully taxable in the hands of an individual. Thus, one must report the correct amount in ITR and pay taxes accordingly. Even though PPF interest is exempt from tax, you are required to report it. This year ITR forms ask individuals to provide details of interest earned from EPF accounts if annual contribution exceeds Rs 2.5 lakh.
Individuals who have paid home loan/education loan EMI during FY 2021-22 should collect repayment certificate from bank/financial institution to claim tax exemption and deductions. An individual can claim deduction under section 24 for maximum up to Rs 2 lakh on the interest paid on home loan EMI. Section 80C is also available on the principal amount of home loan repaid during the financial year.
Deduction under section 80E can be claimed for the interest paid on the education loan during FY 2021-22.
Annual Information Statement
In November 2021, the income tax department launched the Annual Information Statement (AIS). This statement contains details of all the financial transactions conducted by an individual in a particular financial year.
As per the press release issued by the department in November 2021, “The new AIS includes additional information relating to interest, dividend, securities transactions, mutual fund transactions, foreign remittance information etc.” Further, the statement contains the details of the taxes deposited against your PAN with the government.
Individuals must download and cross check the financial transactions from AIS to ensure that all the incomes mentioned in the statement are reported in the ITR form as applicable to you.
Individuals must download Form 26AS from the new income tax portal. Form 26AS is like a tax passbook that contains details of the taxes deducted and deposited against your PAN with the government.
Individuals must cross-check the information available in Form 26AS with the information available in TDS certificates, interest certificates. This is because it may happen that TDS deducted is not reflecting in your Form 26AS due to wrong PAN, wrong assessment year etc. You will not be able to claim credit for the tax deducted/deposited if it does not reflect in your Form 26AS.
Tax-saving investment, expenditure proofs
It is important to collect tax-savings investment and expenditure proofs to claim deduction while filing ITR. Do note that an individual can claim tax-saving investments and expenditures if they opt for the old tax regime at the time of filing ITR. Usually, employees declare and submit all the tax-saving proofs (if they opt for old income tax regime) to their employers to avoid higher TDS on their salary. The proofs submitted is mentioned in part B of Form 16. The tax department takes information from part B of Form 16 and pre-fills it in the ITR form.
However, if you have missed declaring any tax-saving proof, then it can be claimed at the time of filing ITR.
Capital gains from sale of property, shares, mutual funds
Capital gains earned from the sale of property, shares, mutual funds have to be reported while filing ITR. As per the notified forms, an individual having capital gains cannot file tax return using ITR-1; he/she will have to use ITR-2/ITR-3, as applicable. 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. This year ITR forms ask the taxpayer various information relating to sale of building, this includes:
A) Date of purchase and sale of land/building.
B) Details of year in which money spent on improvement,
C) Details of cost of acquisition and indexed cost of acquisition
D) If the property situated outside India is sold, then buyer details are required in the ITR form.
Taxpayers who have sold shares in FY 2021-22 can get the capital gains statement from their broker. Redemptions from mutual funds (both equity and debt) are taxable as capital gains. Taxpayers can get the ‘capital gains statement’ from mutual fund houses and/or Registrar office.
Further, in FY 2021-22, if you have sold bitcoins, then gains arising from such transactions must also be reported in ITR.
According to section 139AA of the Income-tax Act, 1961, an individual is required to quote his/her Aadhaar number while filing ITR. If you don’t have your Aadhaar number yet but have applied for the same, then you would be required to quote your enrolment ID in the ITR form.
Details of investment in unlisted shares
If you were holding unlisted shares during FY 2021-22, then you will have to disclose that information your ITR. In this case, do note that you cannot file your tax return using ITR-1, you will have to use ITR-2 form.
You will have to provide the following details in ITR-2 with regards to the unlisted shares:
a) Name of Company
b) Type of Company
c) PAN of Company
d) Opening balance as on April 1, 2021, and cost of acquisition
e) Unlisted shares acquired during the year with date of purchase, face value of shares, issue price per share (in case of fresh issue)/ purchase price per share
f) Unlisted shares sold during the year and the amount received
g) Closing balance as on March 31, 2022, and cost of acquisition.
Bank account details
It is mandatory to provide details of the bank account(s) held by you during FY 2021-22. Even if you have closed your account during the FY, you will have to report it. You are required to mention your bank name, account number, account type and IFS code. Further, the bank account must be pre-validated to get the credit of income tax refund.