Keep These Documents Ready to File Your ITR on Time! (2023)

Aug 26, 2021

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Keep These Documents Ready to File Your ITR on Time! (1)

Due to the unprecedented COVID-19 pandemic scenario, the Central Board of Direct Taxes (CBDT) had already extended the deadline for filing Income Tax Return (ITR) for individuals from the standard July 31, 2021 to September 30, 2021. It is now expected to provide further relaxation on the deadline for the Financial Year 2020-21. For assessees who are subject to audit, the due date has been extended form October 31, 2021 to November 30, 2021.

The Income tax department (ITD) has launched a new e-filing portal on June 07, 2021, i.e. www.incometax.gov.in to provide convenience to tax payers and speed up the processing of income tax return. However, taxpayers are facing a technical glitch while e-filing through the newly launched portal. Many taxpayers have vented their issues on social media platforms such as Twitter by tagging the income tax authorities in their tweets. This could be the reason for the further extension of the deadline beyond September 30, 2021 for filing ITR for the Assessment Year 2021-22.

Last year in 2020, the income tax department had extended the due date for filing ITR for individuals for FY 2019-20 from July 31, 2020 to December 31, 2020 and finally to January 10, 2021.

It is important for taxpayers to file Income Tax Return on or before the due date and be aware of any changes or updates in order to successfully file the ITR.

Recently I got a call from my friend Rahul. He was planning to file his income tax return for the first time by himself. He said, "Mitali, I need your help with this ITR file and I am planning to use the new e-filing portal. But this documentation work confuses me and I am unable to understand from where should I start...could you please guide me?"

To which I responded, "Sure Rahul, I can understand that filing income tax return could be a daunting task if you are new and unprepared. Let me help you understand how to successfully file your ITR..."

The process of filing your income tax returns requires some preparation. Ideally, the due date for filing Income Tax Return for a particular financial year is July 31st of the ensuring assessment year. The government allows you a period of four months after the end of financial year (on 31st March) to compile all your documents such as income details, Form-16, bank statements, older tax statements, etc.

It is essential to provide complete and accurate information about your income and other required details while filling your income tax return form. Incorrect details may lead to an ITR file being treated as invalid or may even impose a penalty on the assessee. Thus, you must keep ready all the required documentation in advance with updated information to maintain the accuracy of your information in the applicable ITR form.

Income tax return filing is important for individuals if their total income exceeds Rs 2,50,000 in a financial year. As per the announcements in the Union Budget FY2021-22, the Income tax rates have remained unchanged, senior citizens above 75years of age are excluded from income tax filing and the ITR forms will have pre-filled data to ease the compliance for taxpayers.

Keep These Documents Ready to File Your ITR on Time! (2)

In order to prevent any mistakes while filing an ITR, you must collate all your documents in a systematic manner well in time.

Here we will discuss in detail about the documents you require while filing your Income Tax Return for FY 2020-21:

1. Link PAN and Aadhaar

As the income tax department has launched new e-filing portal for taxpayers, linking your PAN and Aadhaar is a vital aspect of the e-filing process. While filling the information in the ITR form, you will be required to e-verify through Aadhaar linked OTP option, which wouldn't be possible if you fail to link your PAN and Aadhaar.

Thus, to attain the benefit of e-filing your ITR you must link your PAN and Aadhaar. The last date to complete the Pan-Aadhaar linking process is September 30, 2021.

2. Documents for Salaried Employees

Salaried employees have to keep documents such as, PAN, Form - 16, and monthly salary slips handy while filing the ITR. The Form - 16 is issued by your employer. It provides the details of your annual income as well as taxes deducted from your salary. You can verify this with your monthly salary slips accordingly. The Form - 16 of an individual acts as a proof of tax paid on time. It proves that the income of an individual employee (earned from their salary) is valid and on records with the Indian government and Income Tax department.

In addition, you are required to collate the information on all taxable allowances you have received, i.e. the exemptions claimed on these allowances such as, house rent allowance, leave travel allowance, etc. Kindly disclose this information in your applicable ITR form.

3. Documents Related to Interest Income

When it comes to evaluating your interest income, keep the documents handy such as, bank statements/passbook for interest on a savings account, interest income statement for fixed deposits, and TDS certificates issued by banks and others.

In some cases, you're eligible for deduction of taxes on interest earned from your bank saving accounts and deposits. In case you are not liable under the taxable bracket, you can simply prevent this tax deduction by submitting Form 15G for individuals/Form 15H for senior citizens.

4. Form 26AS

The Form 26AS, also known as annual consolidated statement, is an important document that contains all tax-related information of the taxpayer like TDS, advance tax, details of pending and completed tax proceedings, tax refunds received, etc. It is an annual credit statement provided by the Income tax department, one of the most important document required for ITR filing.

Consequently, there have been certain updates in the Form 26AS since the past one year. Now it will also include taxpayer's details such as, mobile number, Email-id, and Aadhaar number. You may download this form through the new income tax website, TRACES website, or even via net banking.

5. Documents Related to Section 80C Investments

Ensure that all the investments you have made for tax saving purpose hold valid receipts and related documents for proof. The investments made under ELSS, PPF, ULIPS, NSC, LIC, etc. qualify for deductions under the section 80C of the Income Tax Act, 1961. Consider preserving the receipts and documents for a safer side as proof towards your investments.

The section 80C is one of the popular sections amongst individual taxpayers. It allows a maximum deduction of Rs 1,50,000 in a financial year, from the taxpayer's annual total income.

6. Other Required Documents

Apart from the above mentioned documents, there are several other documents required while filing the ITR that varies for every taxpayers.

  • Interest Certificate for Home Loans - Interest paid on housing loan is eligible for tax saving up to Rs 2,00,000 for self-occupied property. In case of let out or deemed to be let out property there is no limit of interest on housing loan.

  • Capital Gains Tax - Capital gains tax is applicable after selling any capital assets like shares, mutual funds, residential property, gold, etc. You need to ensure that you possess the documents related to any such transactions made in FY 2020-21 for capital gains tax liability.

  • Donation Receipts - Many of you have considered donating to charity and contributing to society. Under section 80G of the Income Tax Act of 1961, the government encourages support for charitable services by allowing you a tax deduction for donations made to charitable organizations. Ensure to maintain your donation receipts as documents required while filing your ITR.

In addition, you should keep the required documents ready that states your income from other sources, information of any additional deductions, education loan interest payments, etc.

Another important aspect of filing your ITR is selecting the appropriate ITR form, as the incorrect one may result in a defective notice from the IT dept.

There are basically four ITR forms that are applicable for individuals:

ITR FormApplicable toIncome Category
ITR 1Individual, HUF (Residents)Total income up to Rs. 50 lacs from salary/pension, other sources, one house property and agricultural income < Rs 5000.
ITR 2Individual and HUFEvery income from ITR 1 > Rs 50 lacs, capital gains, more than one house property, foreign income/asset.
ITR 3Individual, HUF, and a partner in a Firm.Every income from ITR 2, profits and gains from business/profession, as a partner in a firm.
ITR 4Individuals, HUF, and Firm (other than LLP)Every income from ITR 1, income from business/profession which is computed under, sections 44AD, 44ADA or 44AE.
(Source: www.incometaxindia.gov.in )

Do note that, after filling the ITR form it should be e-verified at the same time or later, i.e. within 120 days of the filing of ITR. If the taxpayer is unable to e-verify the ITR form, then the signed copy of ITR-V should be sent to Centralized Processing Centre (CPC) of the IT department in Bangalore.

The Income Tax Return filing deadline is just a month away. Even if you get some more time due to expected further extension, one of the precautionary steps you must take is systematically arrange your list of required documents. The experts are urging taxpayers to avoid any delay towards this critical financial task. You should file your income tax return now to avoid the mistake of procrastinating until the last minute.

Many taxpayers tend to delay their ITR filing till the last day, which creates a hotchpotch, as you need to collate several documents and information required to file the ITR for the specific financial year. Due to the discretions of coronavirus pandemic, the ITR filing due dates have been extended, and taxpayers are of the view that they will get another extension. However, it's prudent to file your income tax return well on time and organise your documents beforehand.

If as a taxpayer you fail to file your income tax return before the due date, it may lead to errors and a penalty will be charged in the form of late fees. Therefore, to avoid such consequences, it's better not to wait until the last minute or expect an extension date. You must keep the above mentioned documents ready and file your Income Tax Return as early as possible.

Warm Regards,
Mitali Dhoke
Jr. Research Analyst

Frequently Asked Questions (FAQs)

1. What is ITR filing?

Income Tax Return (ITR) filing is a process consisting a form in which taxpayers file information about their income earned and tax applicable to the income tax department. It contains information about your income and the taxes to be paid during the financial year. The ITR form declares the net tax liability, claiming of tax deductions, and report the gross taxable income.

2. Who should file an ITR?

It is mandatory to file an income tax return if the aggregate of all your income exceeds the basic exemption limit. There are various criteria of basic exemption limit based on your age and income slab. Kindly refer to (www.incometaxindia.gov.in - tax slabs for AY2021-22)

3. What is the time period to file an ITR?

You should file your ITR on or before the mentioned due date to avoid any errors. Ideally, an ITR should be filed on or before July 31st of the assessment year. For example, to file ITR of FY 2020-21 the due date will be July 31, 2021. (Currently an extension is provided on deadline for ITR filing due to the pandemic situation.)

4. What happens if I fail to file my ITR before due date?

In case, you fail to file your ITR before due date, it will lead to certain ramifications and you will be charged late fees as penalty. The non-filing of ITR might be considered as tax evasion, which is punishable under Income Tax Act, 1961.

5. What are the benefits of ITR filing?

If you file your income tax return on or before the due date with accurate information, you could save on your tax with applicable deductions and get a tax refund. If you file your ITR well in time without delaying it until last minute, you will avoid errors, undue stress, and a penalty.

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