A guide for all you need when filing tax returns

For starters, choosing the right ITR Forms based on your income from different sources are the first step to ensure an error free tax filing (see graphicFor example, if you are a salaried individual who has earned capital gains on sale of equity shares, you cannot file ordinary ITR-1 and you have to opt for ITR-2. But, if you have entered the derivatives markets, you need to choose the more complex ITR-3 or ITR-4 as income from futures and options (F&Os) is considered business income. Similarly, it is important that you match all the auto-populated information in the ITR form with the personal income certificate to avoid receiving tax notices from the taxpayer. As you gear up to file your tax return, Mint Gives you a comprehensive guide on the two important steps involved in the process.

Pre-validate bank account

This step is important if you are expecting a refund on the additional tax paid to the IT department. It is advised that you validate the bank account in which you wish to deposit the tax refund before filing your tax return. The option to validate the bank account is available under the ‘My Profile’ tab in your account on the e-filing portal.

The IT department validates only those bank accounts that are linked with your PAN for refund. Further, during the verification process, you will have to provide the same mobile number as is available with your bank on the e-filing portal. Any discrepancy in the details may lead to rejection of the verification request. To avoid this, cross-check the phone number available with your bank and if necessary, change it with the bank before starting the verification process.

If the verification request is declined, you must wait at least 24 hours to make a new verification request.

collect important documents

Even though ITR forms are pre-filled in the newly developed e-filing portal since this year, some incomes, such as capital gains, need to be filled manually and some tax deductions and exemptions may not show up in your Form 26AS Can give Moreover, the ITR form has also been made exhaustive, so it is more important to get all the information correctly.

Before you sit down to file your tax return, these are some important documents you should collect and keep ready.

Form 16: It is an income certificate containing details related to the total salary paid by an employer along with the amount of tax deducted on it. Form 16 is especially useful for new earners who have only salary income and opt for ITR-1. As much information as already mentioned in ITR-1, taxpayers can refer to Form 16 provided by their employer to cross-check the information.

Form 16A, Form 16B and Form 16C are other TDS certificates containing information on income other than salary. For example, TDS on interest income on deposits by banks and post offices is shown in Form 16A, while TDS on rent receipts is shown in Form 16C etc.

Form 26AS: This document is a consolidated tax credit statement that contains all the information related to TDS deducted and advance and self-assessed taxes paid by your employer, banks and other institutions. From the last assessment year, the IT department expanded the scope of Form 26AS to include information on high value transactions. Form 26AS is issued by the IT department, so you should match the information in it with the individual TDS certificates issued by the respective institutions to ensure error free ITR filing.

Capital Gains Statement: The purchase and sale deed of the property is required if you have sold an immovable property and earned capital gains. You are not required to submit these documents; Instead, they are used to calculate profit. Also, IT laws compel the buyer to provide the PAN details of the seller of the property in his ITR, so be sure to get the information from the seller.

For capital gains made on the sale of a mutual fund unit or stock, the mutual fund house and stockbroker respectively provide the capital gains statement.

Tax Saving Investment Proof: If your parents are senior citizens who are not covered under a medical insurance policy, you can claim a deduction on their medical bills. Similarly, donations made to eligible institutions can also be deducted from total income for tax benefits. These deductions are generally not declared to the employer and therefore may not appear on your Form 16.

While you are not required to submit supporting documents in ITR while claiming such deduction, you should keep the bills and receipts handy while filing the return to calculate the total amount to be claimed.