What documents are needed for tax filing after sale?

When a property or land is sold, the seller must file income tax returns reflecting the capital gains, and submit related documents to support cost calculations, exemptions claimed, and tax paid. These documents are essential for accurate reporting, and for responding to any queries from the Income Tax Department during assessment.

1. Sale Deed

• The registered sale deed is the most important document that provides:
  
  • The actual sale value
    
  • Details of the buyer and seller
    
  • Date of transfer
    
• It is used to determine the date of sale and compute capital gains.

2. Purchase Deed or Agreement

• Shows the original purchase price and date of acquisition of the property.
  
• Required to determine cost of acquisition, especially for long-term capital gains (LTCG) calculation.
  

3. Cost of Improvement Documents (if any)

• Bills, invoices, and contracts for:
  
  • Renovation
    
  • Extensions
    
  • Repairs or structural modifications
    
• Used to increase the cost base, reducing the taxable capital gains.

4. Capital Gains Calculation Sheet

• A self-prepared or CA-prepared capital gains working sheet showing:
  
  • Indexed cost of acquisition
    
  • Indexed cost of improvement
    
  • Net capital gains after applying indexation
    
  • Exemptions claimed (if any)
    

5. TDS Certificate (Form 16B)

• If the sale value exceeds ₹50 lakh, TDS would have been deducted by the buyer.
  
• Form 16B, issued by the buyer, shows the amount of TDS deducted and deposited.
  
• This is used to claim credit while filing the return.
  

6. Form 26AS / Annual Information Statement (AIS)

• Shows all tax credits and high-value transactions reported against the PAN.
  
• Cross-verifies the TDS amount, sale proceeds, and advance tax (if any).
  

7. Bank Statements

• Reflects receipts from the buyer, including:
  
  • Advance payments
    
  • Final settlement
    
• Helps establish the timeline of transactions and confirm matching of values.
  

8. Documents for Exemptions (If Claimed)

If the seller has reinvested capital gains under specific exemptions:

a. Section 54 or 54F

• New property purchase deed or construction agreement
  
• Payment receipts
  
• Loan sanction letters (if home loan taken)
  

b. Section 54EC

• Bond certificates issued by REC, NHAI, PFC, etc.
  
• Proof of investment within 6 months
  

c. Capital Gains Account Scheme (CGAS)

• Deposit receipt and passbook from authorized bank
  
• Application form used for deposit under CGAS
  

9. PAN Card and Aadhaar Card

• Mandatory for e-filing returns
  
• Must match with the ownership details mentioned in sale deed and tax portals
  

10. Income Tax Return (ITR) Form

• Usually ITR-2 is used by individuals reporting capital gains
  

If the sale involves business income (e.g., dealer in land), then ITR-3 may be applicable