Tax Talk: Six documents that help you file an accurate ITR

Filing income TAX return (ITR) presents a final opportunity to not only pay your due taxes but also review your financial situation from the previous year and make plans for the next year. To simplify the filing process, the income tax department provides Form 26AS, Annual Information Statement (AIS), and also pre-fills certain details such as tenant information, employer details, etc., from your previous year’s tax return. However, it is crucial to keep the following documents handy while preparing tax returns to reconcile and ensure the accuracy of the information provided.

Form 16

Form 16 is essential for reporting salary details in your ITR. It provides a comprehensive breakdown of your salary, exemptions, deductions and TDS deductions.

House loan statement

Deductions for home loans are available under Section 24 for interest on house loans and Section 80C for the principal component. A house loan statement provided by the lender provides a clear breakdown of the interest and the amount repaid during the financial year, enabling you to claim the appropriate deductions.

Bank statements

Bank statements offer a detailed overview of all financial transactions throughout the year and play a crucial role in filing your ITR. In some cases, income might not be reflected in Form 26AS or AIS due to non-reporting from the relevant parties or the absence of TDS deductions. However, such income can be easily identified from your bank statements.

The amounts reflected in bank statements represent net income, i.e., income received after the deduction of TDS. Therefore, when filing your ITR, it is essential to gross up the amounts by adding the TDS to accurately declare your income.

Interest certificate

Term deposits are popular investment options in India. While the amount of a term deposit is received only upon maturity, the interest on the deposit accrues annually. An interest certificate helps determine the amount of interest accrued during the year and allows you to declare the interest on an accrual basis.

Securities statement

A securities statement or holding statement provides a comprehensive record of all transactions related to securities such as equity, mutual funds, bonds and debentures, throughout the financial year. This statement includes information like purchase and sale dates, as well as the amounts involved. This information is necessary for calculating capital gains for the year.

While Form 26AS and AIS provide information about your gross income and tax credits available with the I-T department, it is the taxpayer’s responsibility to ensure that the correct and complete information is declared in the ITR. Having these documents in hand will assist you in accurately filling your ITR and calculating your tax liability.

The writer is partner, Nangia Andersen India. Inputs from Neetu Brahma