However, irrespective of the option you choose (online or offline), there are a few papers you must keep in order while filing returns.
1) PAN Card
An individual’s PAN is the most important document in any communication with the tax authorities. Therefore, the taxpayer must be careful while keying in the PAN.
2) Form 16
Form 16 is a certificate of TDS given by an employer in which it details the salary paid to the employee as well as the taxes deducted during the financial year. However, in case no TDS is deducted, the employer need not issue Form 16.
3) Form 16 A
Popularly known as the TDS certificate, it has all the details regarding TDS on income such as interest earned on fixed deposits or savings accounts. It can be procured on request from the financial institution you hold an account with.
4) Form 26AS
This is mostly overlooked, which is surprising considering it is easily accessible on the tax department website (incometaxindiaefiling.gov.in) against your PAN number. It mentions history of TDS deducted by all institutions during the financial year. Hence, it is advisable to match the figures in Form 16 and Form 16A against details in Form 26AS. Often, a discrepancy can cause the taxman to question you.
5) Bank Statement
This is required to calculate the interest earned on savings account. In case the interest earned is more than Rs 10,000, one has to pay tax as per one’s tax slab.
6) Fixed Deposit Statement
These deposit statements are important as one has to calculate the interest earned from all such deposits in a financial year and pay tax on the amount earned. In case the amount is over Rs 10,000, the bank deducts tax at the rate of 10 per cent. If the person’s tax slab is higher, he will have to pay the difference while filing the return. Same is the case with recurring deposits.
7) Proof of Investment & Deductions
This essentially means the receipts of investments made under various Sections of the Income Tax Act. Normally, salaried individuals hand out these receipts to their employers and these details are captured in Form 16. In case any investment isn’t mentioned, one can key in the details while filling the return form for claiming refund of the extra taxes paid.
8) Contract notes (stock trading)
Any gains from trading in shares are considered as capital gains from the taxation point of view. In case the shares were bought and sold within a financial year, it would qualify as a short-term transaction for which tax has to be paid. Most brokers these days provide capital gains statements classifying short-term and long-term gains at the end of each financial year, making it easier for taxpayers to fill in the required sums. Long-term gains from equities, including equity funds, are tax-free.
9) Tax Challan
In case advance tax has been paid, the details of the challan will also have to be keyed in the return form.
10) Property Details
If you have sold any property, land or house in the last financial year, the income generated has to be mentioned in the return.
Things That Must Be Avoided during Income Tax Filing
- Opting for incorrect assessment year
- Selecting the wrong ITR form
- Providing incorrect communication details
- Feeding in incorrect TAN details of employer
- Closing the income tax refund bank account
- Forgetting to verify ITR data with tax department’s data against your PAN number
- Failing to declare all sources of income
- Trying to file separate ITRs based on multiple Form16s
- Not reporting foreign assets and accounts