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Do we have to photocopy all the documents for 5 years or is it alright if we have photocopy of documents of the last 2 years or so...

Also let me know which documents should are important

Photo copies of 12 months pay slips, 12 months bank statements and letter from your employ would be enough.

It's not a problem even if you don't take them as well. They will get photocopy over there.