Keep tax-return documents safe

This is the time of the year when you file your tax returns. Normally, there is a tendency to file the tax returns closer to the due date.

This leaves little time for proper planning or thinking about keeping a document trail which substantiates the claims made in the tax return. This document trail will come in handy in case you receive a letter from the tax authorities to submit proof of income, deductions and taxes paid later on.

Though the tax returns are annexure less, it does not mean that the tax authorities will not seek these documents at a later stage. So, maintaining documentation is as important as filing the tax return within the due date.

The tax authorities may call for the documents/information for a period of seven FYs, from the end of the relevant FY. You are required to maintain all the necessary documents relating to tax return filed till the completion of assessment.

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for salary earners

When it comes to salary income, the first and foremost document you need to retain is a copy of your Form 16 issued by the employer.

If you are staying in a rented accommodation and claiming an exemption for the house rent paid, keep a copy of rent receipts/rental agreement.

In case you have claimed deduction for investments/payments such as life or medical insurance, public provident fund contribution, national savings certificate and donations, you should retain a copy of these receipts.

You can generate a statement called Form 26AS from the Income tax authorities’ Web site to verify whether the taxes deducted have been deposited with the Government.

In case you own a house property and have an income or loss from that property, you would need to maintain documents such as purchase deed, challan for taxes paid to the local authorities, interest certificate received from a bank/ financial institution, if you have availed a loan for buying such property. In case you own a property which is rented, keep a copy of the lease/rental agreement entered with your tenant.

You may have invested in shares, mutual funds, bonds or other financial instruments and would have earned income or incurred losses, then you need to keep a track of all these transactions. You can do so, by retaining a copy of broker’s note, statement of demat accounts with the details of your trade/ distributions and details of dividend received.

Also, it would be a good idea to tabulate all the transactions to have a better financial planning. If you sell your house property, keep a copy of the sale deed handy and retain receipts for expenses such as brokerage and commission.

Most salary earners would be earning a nominal amount of interest from their salary account.

Keep a copy of the bank statement to show the amount credited. In case bank deducts tax on the interest amount and issues a Form 16A, keep a copy of the same.

Important documents

For one’s good financial health, it is important to maintain the following documents –

Acknowledgement along with a copy of tax return, Form 16, 16A, 26AS, tax payment challans;

PAN records, bank statements and credit card statements, a record of high value transactions;

Income of dependent spouse, children, all records for housing loan, details of any asset inherited/gifted and foreign travel expense details.

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