Registering an income tax return (ITR), especially for first-time filers can be difficult as it requires a lot of documents related to a taxpayer's investments.
The government grants four months window period to gather all the documents. The deadline for filing ITR for FY19-20 has been continued till December 2020. ITR is a required document for people seeking a home loan or a car loan.
For all salaried selves, Form 16 is the most significant document for filing the ITR. This certificate is issued by the employer to its employees. It is a compulsory document and every employer is liable to issue Form 16 to all its employees from whom income tax has subtracted from their salaries. It is a tax subtracted at the source certificate and carries the details of the salary paid to the employee and their TDS.
Now what your obligation know about Form 16 is that it consists of two parts – Part A and B. Part A is the piece that consists of the income tax deducted by the employer in the financial year. Clearly, it has the Permanent Account Number (PAN) details of the employee and the Tax Deduction Account Number (TAN) of the company. Part B of Form 16 includes the break-up notice of the employee’s gross salary.
Income Tax Department produces an annual consolidated tax statement which is recognized as 'Form 26AS'. Using PAN, all taxpayers can quickly access it from the income-tax website. It contains the number of the TDS of the salaried class and taxes paid during the financial year (in the case of self-employed or businessmen).
Taxpayers can refer to their Form 26AS and jibe it with their Form 16 for the amount of taxes they paid to the treasury of the central government while registering the ITR.
Improved 'Form 26AS' presented by the government last month. It carries details in multiple categories of an individual’s financial transactions specified in the Statement of Financial Transactions (SFTs).
Documents related to interest income
Apart from the income from salary, a person gets income from various interest expenses such as savings account deposits and fixed deposits from banks and post office. These financial companies provide interest certificates/bank statements to their depositors for the same. A person can claim deduction under section 80TTA of the Income Tax Act up to Rs 10,000 on the gain earned from their savings account held with a bank/post office.
Tax Saving Investments
Those people who could not submit their tax-saving investments to their employers during the declared period in the previous financial year will now have to submit the proof of the same directly to the Income Tax (I-T) Department for declaring tax deductions.
These include acquisition of life insurance (LIC) premium paid, receipt of medical insurance, Public Provident Fund (PPF) passbook, 5-year FD receipts, mutual funds purchase (ELSS), home loan repayment certificate/statement, donation paid receipt, tuition fee paid, acquisition, etc.
Under Section 80D for payment of health protection and incentives, you can claim up to Rs 25,000. These insurance policies could be for yourself, your wife, or your kids. In the case of senior residents, the limit is Rs 50,000.
You can claim a supplementary deduction under the Section if you are paying premiums for your progenitors. The frontier is Rs 25,000 if your parents are less than 60 years of age. If your parents are over the age of 60, you can declare a maximum of Rs 10,000 per year.
Interest paid on housing loan: Interest on a home loan is eligible for tax saving. This is for a self-occupied home.
Education loan interest amount.