This year, Govt. has extended time limit for filing an individual income tax return for the Financial Year (FY) 2019-20 (Assessment Year (AY) 2020-21) from July 31st 2020, to November 30th 2020. Salaried people usually file their tax return using either ITR-1 or ITR-2 which is available on the e-filing website.
However, despite the online process, filing of ITR can become a tedious job if one has not assorted all their documents properly. It should be noted, first, that a taxpayer needs to mandatorily link Aadhaar with PAN for the AY 2019-20 on or before the filing of income tax returns. The other documents that one must keep with them before filing your ITR for FY 2019-20:
1. Form 16 & Salary Slip : It is essentially a certificate that an employee gets from his/her employer. It validates the fact that TDS has been deducted & deposited with the authorities on behalf of the employee. Form 16 consists of two parts - Part A & B.
Part A is the portion that consists of the income tax deducted by the employer in the financial year. Separately, it has the name and address of the employer, Permanent Account Number (PAN) details of the employee, and the Tax Deduction Account Number (TAN) of the employer.
Part B of Form 16 includes the break-up information of the employee’s gross salary.
An individual will require salary slips, as ITR-2 form asks individuals to specify the nature of salary income such as basic, dearness allowance, house rent allowance, among others.
2. Certificates related to interest income : The ITR form also asks taxpayers to specify the source of their interest income, such as fixed deposits, saving accounts among others. The interest income received from banks is taxable. However, an individual can claim deduction under Section 80TTA of up to Rs 10,000 on the interest earned on savings held with the bank or post office. Similarly, senior citizens can claim a deduction of up to Rs 50,000 on their interest income.
An individual must have updated bank statement/passbook for interest on a savings account, interest income statement for fixed deposits & a TDS certificate issued by banks & others for filing ITR.
3. Tax Saving Investments : Tax saving investment helps in lowering the tax liability of an individual. Popular tax-saving options available to individuals & HUFs in India under Section 80C of the Income Tax Act. An individual can claim deductions up to limit of Rs 1.5 Lakh in a financial year.
Common tax savings investments under Section 80C are, Employees Provident Fund (EPF), Public Provident Fund (PPF), Medical or Life Insurance, National Savings Certificate, National Pension System; ELSS Funds, etc. An individual can also claim a deduction of maximum Rs 25,000 in a year on health insurance premium paid for self, spouse, or children under Section 80D. Moreover, an individual can also claim a deduction of Rs 50,000 depending on the parent’s age. If the parents’ age is below 60 years, one can claim an additional deduction of Rs 25,000. If the age is 60 years or above, then a claim of Rs 50,000 can be made.
Interest on housing loan is eligible for tax saving of up to Rs 2,00,000. This is for a self-occupied house. Interest paid on home loan can lower your tax liability under section 24.
4. Form 26AS : It is a consolidated annual tax statement. This form includes details like TDS deducted by the employer, TDS deducted by banks, TDS deducted by other organisations from payments made to you, self-assessment taxes paid by an individual.
5. Capital Gains : If an individual has earned some capital gains from the sale of the property &/or mutual funds/ equity shares, then he/she will be required to report these gains in their ITR.
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