If you are reading this article, You are a person with the integrity to serve your country by paying taxes. Furthermore, you have been doing this for quite a long time. Now, You have accumulated lots of ITR documents. You are not sure whether you should keep them safe. Or let them be dusted on the old bookshelf. If this is the case with you, In this article, I’ll share with you all that is to know about how long you should keep tax returns. You are keeping those documents because you think someday in the future you might need them as proof of your ITR returns.
Documents that you should save for ITR
While having the actual ITR filing is essential, You must also save all the 80c documents you have gained tax exemption. These documents include rental agreements, donation receipts, and other documents related to tax exemption. It’s important to note that the Income Tax Authority does not ask you about the evidence for your Tax exemption while filing ITR. It’s a self-declaration of income and expenses. But it’s a good idea to save those documents even when they are not required for a certain period. Also, In some cases, they might ask you to send documents to the income tax office.
How long should you keep tax returns?
GOI does not suggest any particular timeframe for keeping your tax returns. But with some understanding and reading of ITR rules, We can estimate the timeframe that is considered safe. While in some rare cases, the Income Tax authority can investigate tax returns for an indefinite period. But in most cases, Section 149 prohibits the tax authorities to only investigate tax returns for seven years. This means that your tax filing for FY 2020-21 should be kept safe for FY 2027-28. The seven-year period is one of the safest and considered the best by chartered accountants.
For Foreign Assets
Suppose your income is generated through foreign assets. You have to save those documents for a longer period. Any person having income through foreign assets has to keep his IT documents for about 17 years. It is advisable to keep separate documents for all your non-domestic income and maintain a strong track record of that income.
Should you keep tax returns for more than seven years?
Yes, it doesn’t hurt to keep documents that can save you from a lot of trouble in the future. If you don’t want to store documents physically, Then make a digital copy of all the documents and save that in a cloud drive.