When you file your income tax return in India, your bank statement is the foundation. It helps you verify income, claim deductions, and spot discrepancies before the IT department does.
Which transactions matter for ITR
Credits matter most. Every large credit to your account - salary, freelance payments, rent received, interest income - needs to match what you declare. Debits matter for deductions like insurance premiums paid, home loan EMIs, and PPF contributions.
Interest income
Check your statement for credits from the bank itself. Savings account interest is taxable above Rs 10,000 per year under Section 80TTA. Fixed deposit interest is fully taxable. Both should appear on Form 26AS and match your statement.
Reconciling with Form 26AS
Download Form 26AS from the income tax portal. Compare the TDS entries there against your bank statement. Any credit where tax was deducted should appear in 26AS. If they do not match, contact the deductor to correct it before filing.
How many months to keep
Download statements for all 12 months of the financial year (April to March). Keep them for 7 years. The IT department can reopen assessments up to 6 years back, so having clean records matters.
Related reading: How to Reconcile Your Bank Statement, How to Prepare Bank Statements for Your CA, GST and Bank Statements for Businesses.