If you waited till the last moment to invest in tax-saving instruments, you would need to declare those investments while tax filing to claim deductions.

 While the government has extended income tax return filing deadline yet again till November 30, first-time income tax return filers are still confused about the whole process. For people who are filing income tax returns for the very first time, they are going through the exhausting process of figuring out what documents you require, how to collect those documents, which forms to fill etc. 

If you are aware of all the details mentioned above, you can very effectively file your return without any stress. Knowing all the fine details and keeping all the documents ready, can make the whole exercise so much easier.

Here's everything you need to know about Income Tax Return filing: 

Documents required:

1. Form 16: This is a certificate issued by your employer specifying the details of tax which has been deducted from your salary and paid to the income tax department. Most employers issue this form before 15th June. However, the date has been extended this time.

2. Form 26AS: Form 26AS is your consolidated annual tax statement. Form 26AS needs to be checked properly before filing the income tax return for a particular financial year as the form contains details of tax deducted by your employer/tenant/other trade partners. It also shows the tax deducted by banks on your FD interest income. The tax statement also contains details of all taxes paid by you as well as the refund granted.

Form 26 AS contains details of:

• Information relating to tax deducted or collected at source
• Information relating to specified financial transaction like sale/purchase of property, investments, pending proceedings and demands.
• Information relating to payment of taxes
• Information relating to demand and refund
• Information relating to pending proceedings
• Information relating to completed proceedings
• Information about payments made to banks for getting demand drafts, pay order as well as cash deposited and withdrawn beyond certain limits. 

3. Salary slips: For salaried taxpayers, it is essential to keep a couple of salary slips handy because it is mandatory to specify the salary breakup while filing your returns.

4. Capital Gain Tax Statement: In case if you have invested in stocks and mutual funds, you will require a capital gain statement. It contains all the short-term and long-term capital gains you earned in that financial year, which is mandatory to mention while filing your income tax returns. Even though you may not have to pay taxes on long-term capital gains, you are still required to mention them in your ITR.

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Additionally, if you have sold a house or property in the last financial year, you need to calculate and report capital gain. To calculate this, you will need the purchase and sale deed.

5. Tax Saving Proofs: If you waited till the last moment to invest in tax-saving instruments, you would need to declare those investments while tax filing to claim deductions. So, get all your investment proofs like insurance premium, ELSS fund investments, etc. Apart from that, if you have claimed a deduction for education loan and home loan, you also need the loan statement from the bank.

6. Interest Certificate: The interest earned by individuals from saving bank account, fixed deposits, recurring deposit, and post office deposits are considered as “Income from other sources.” These interest incomes, hence, are taxable. Earlier, you had to report a consolidated figure under the “income from sources” head. However, from this year onwards, interest income accrued from all of the deposits, bank account, income tax refund has to be declared separately. So, you need to get these documents from your bank and other financial institutions.

ITR Forms: After you have collected all documents required to furnish the details in the ITR form, you need to pick the right ITR form. The income tax department has made some changes to ITR forms this year. So, it is advisable to read up on these changes and understand which ITR form you need to fill. Remember that if you use the wrong ITR form, your returns will get rejected, and you may be asked by the tax department to resubmit it.

Identify the right ITR form for filing your returns:

      
Details to be mentioned: Once you have picked the form, make sure you put all the details correctly. Apart from the details already mentioned, you will need to provide your bank details (Name according to the PAN card, Account number, IFSC code), PAN number, and email id in the ITR form. Make sure that every detail is right, as any mismatch with the records available with the income tax department can lead to rejection of the returns.

In case your contact details are incorrect, you will miss out on communication sent by the income tax department regarding your refund or any discrepancies that need attention.

ITR filing deadline: If you don’t file your ITR for the last assessment year by November 30, 2020, you will have to pay penalties. The government introduced a new section in the income tax act last year which enables it to levy a maximum penalty of Rs 10,000 for delayed submission of returns The penalty is calculated basis how late you submit your ITR.

A penalty of Rs 5,000 is levied if returns are submitted after the expiration date but before 31st December of the relevant assessment year. Rs 10,000 fine is levied if the ITR is submitted after 31st December of the relevant assessment year. However, taxpayers whose yearly income is below Rs 5 lakh, are required to pay just Rs 1,000 as a penalty if they missed the deadline.