Monday, 16 January 2012

Submit tax saving investment proof to avoid over TDS

This is the last quarter of a financial year and almost all employees are hurry to submit their tax saving investment proof to the employer. An employee must submit his or her tax saving investment proof to the employer in time for the proper calculation and deduction of income tax (TDS). If not, employer will deduct your tax with the assumption that you do not have any tax saving investments.

The employer normally deduct tax from the beginning of the financial year with the consideration of your declaration of tax saving, which you declare that you would invest in a few tax saving investments.  When you submit the proof of tax saving investments after the investments made, the employer can ensure that you have done the investment as you declared and can calculate tax accordingly.

If your tax investments are lesser than you declared, your tax liability will be more than deducted by the employer and then he should deduct more to compensate the shortfall. Just like if you invest more than you declared, the employer can compensate, if possible as per rule.

Check your tax saving investments with the following list

Tax saving investments under section 80 C   (Maximum limit is Rs. 100000)

PPF or Public Provident Fund – Copy of Receipts or Updated Pass book

EPF or Employees Provident Fund - The proof is already with the employer

NSC or National Saving Certificate – Copy of original Certificate

5 years Tax saving Fixed Deposits – Copy of original Fixed Deposit Receipt

ELSS or Equity Linked Saving Scheme – Copy of Statement of the Mutual Fund

Unit linked Insurance Plan – Copy of premium payment

Other payments or expenses under section 80 C (which includes the above maximum limit of Rs. 100000)

Tuition Fee of children paid to recognized regular education institution – copy of certificate from the school or college.

Principal Amount repayment of housing loan from recognized housing financial institution – Copy or certificate of payment from bank or financial institution.

Life insurance premium – Copy of the premium receipts

Other deductions

For the exemption of House Rent Allowance – Rent Receipts

Interest on housing loan under section 24b (maximum limit is Rs. 150000) – copy of interest payment certificate from financial institution

Tax saving under section 80CCF – Maximum limit is Rs. 20000 in infrastructure bond- copy of receipts and copy of certificate or statement when received

Payment of Rent – submit From 10 BA (Read the conditions of exemption of rent payment)

Medical Insurance under section 80D – Maximum limit is Rs. 15000 (Rs. 20000 if one of the insured is senior citizen – over the age of 65 years) – submit copy of receipt

Medical insurance of parents or parents in laws - Maximum limit is Rs. 15000 (Rs. 20000 if one of the insured is senior citizen – over the age of 65 years) – submit copy of receipt.

Travel receipts (for LTA claims) – copy of receipts

Declare other income, if any, to the employer – if you have any other income such as interest, rent of house property, capital gain etc., declare it to the employer and allow him to deduct tax accordingly to avoid last minute tax payment by you, while filing income tax return.

Submit all the above proofs to the employer and avail maximum tax exemption while calculating and deducting TDS.

tax saving investment proof


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