Minimum Retention Period as per Law

• Taxpayers should retain income tax records for at least 6 years from the end of the relevant assessment year.
  
• This period is calculated from the financial year in which the return is filed.
  
• The Income Tax Department has the right to reopen assessments for up to 6 years in most cases.
  
• For example, for returns filed for FY 2022–23 (AY 2023–24), records should be kept until March 2030.
  
• This rule applies to individuals, HUFs, businesses, and professionals.
  

Extended Period in Case of Scrutiny

• If income escaped assessment exceeds ₹50 lakh, the department can reopen returns up to 10 years.
  
• In such cases, records should be kept for at least 10 years to be safe.
  
• If a case is under litigation, scrutiny, or appeal, documents should be preserved until the case is resolved.
  
• Retention may be longer if specifically required by notices or court orders.
  
• Keeping documents beyond 6 years is advisable for high-value taxpayers or complex cases.
  

Types of Records to Preserve

• Copies of filed ITRs, acknowledgment receipts, and e-verification proofs.
  
• Form 16, Form 26AS, AIS, TDS certificates, and salary slips.
  
• Bank statements, rent receipts, investment proofs, and insurance premium records.
  
• Documents supporting capital gains, business income, and deductions.
  
• Proof of tax payments like challans and refund details.
  

Business and Professional Taxpayers

• Businesses and professionals under tax audit must retain books and records for 6 years from the end of the relevant AY.
  
• This includes ledgers, invoices, payment vouchers, cash books, and audit reports.
  
• In some cases, GST and company law provisions may require longer retention.
  
• Electronic records and backups should also be maintained securely.
  
• Non-compliance can lead to disallowances or penalties during scrutiny.
  

Practical Tips for Record Maintenance

• Organize records year-wise and category-wise for easy access.
  
• Maintain both physical and digital copies with backups.
  
• Use cloud storage or secured drives for long-term preservation.
  
• Retain all records even after retirement or cessation of business, for a minimum of 6 years.
  
• Having well-preserved records ensures smooth handling of notices, audits, and verifications.