It’s time of the year when everyone including your
employer is worried about your taxes. Most people would have received mail from
their Accounts department about “submission of proofs for investments done to
claim income tax exemption”. In case you have not, it might be on its way.
This
post helps you understand why It is the time for Submit the Income
Tax deduction Proof to Employer – With Automatic Tax Preparation Excel Based
All in One TDS on Salary with Form 16 for F.Y.2015-16
Salaried class
needs to submit these proofs to their employers, how it should be done, what
documents to be submitted and if there is a deadline?
Why
Employers Ask for Tax Saving Investment Proofs?
Employers are responsible to
deduct income tax (TDS – Tax deduction at source)
from salary paid to its employees and deposit the same to income tax
department. But income tax is complicated and the final tax depends on the tax
saving investments a person makes or if the person lives on rent or if he has a
house. So to compute your taxes correctly your employer asks for a declaration
at the start of financial year (in April). The TDS is deducted based on
this declaration.
As we approach the end of financial
year, employer wants to make sure you did what you declared as it impacts the
tax calculation. So it asks you to submit proofs for income tax saving
investment that you made, rent receipts along with any other documents. Once the proof is submitted the employer
computes tax based on the actual investments made and TDS is adjusted
accordingly.
AlsoDownload Master of Form 16 Part B for F.Y.2015-16: [This Excel Utility Can prepare at a time 50 employees Form 16 Part B for FY 2015-16.]
When
does Employer ask for Proofs?
There are no guidelines about when any employer should
ask for investment proofs. Some companies start asking for the same in December
but most of them would ask for it before end of January. This is asked so early
on as the enhanced tax deduction can be done from 2-3 months’ salary. Also this
awakes the lazy ones and they start their tax planning.
What if
you do not Submit the Proofs?
In case you do not submit the
proofs, employer would not be able to give you tax benefit on your tax saving
investments. This would lead to higher deduction
of taxes. You can claim
refund of these taxes only during filing of tax returns.
Documents
to be Submitted
Indian
income tax laws are complicated and have multiple exemptions and investment
options. Below is the list of documents that needs to be submitted to your
employer to get relevant tax deductions.
Download All in One TDS on Salary for Private (Non-Govt) Employees for the Financial Year 2015-16 and Ass Year 2016-17 [ This Excel Based Software can prepare at a time Income Tax Compute Sheet + Automatic H.R.A. Exemption Calculation + Individual Salary Sheet + Individual Salary Structure for Central Govt Salary Pattern + Automatic Form 16 Part A&B + Automatic Form 16 Part B + Form 12 BA for F.Y.2015-16]
House
Rent Allowance (HRA) u/s 10(13A):- Click here to download the Automatic HRA Exemption Calculator U/s 10(13A)
Following
documents need to be submitted to claim tax benefit on HRA:
§
Rent
receipt for starting and the end month and of intermediate
month in case there has been change in rent or rented accommodation. So you
need to submit rent receipt for April and Dec/Jan if there is no rent change.
§
The rent receipt must have One rupee revenue stamp on it (ideally a revenue stamp is required for receipts if the rent
is paid by cash and is over Rs.5,000 but most employers still ask for it).
§
No rent receipt is required if the monthly
rent paid is below Rs.3,000
§
Some employers may also ask for copy of rent
agreement.
§
If the annual rent paid exceeds Rs 1 lakh you also
need to give PAN number of the landlord. In case your landlord
does not have PAN
card, a declaration needs to be submitted stating so.
Also Read: What
can you do if your landlord does not give his PAN number?
Home
Loan Interest u/s 24
§
Copy of Provisional Interest certification from Bank/Financial
Institution stating the amount of principle and interest separately.
§
The certificate should also have the loan
sanction date
§
Copy of Possession Certificate
§
Copy of Sale Deed (In case possession letter in not
available)
§
Copy of Lease deed, in case of let out property
§
In case of Joint Home Loan, self-declaration of the ownership proportion needs to be furnished
§
Form
12C
Medical Insurance Premium u/s
80D
§
Copy of Insurance Premium receipt paid
§
Copy of receipt for Preventive Health Checkup
for self, spouse, dependent children or parents
Interest on Repayment of Education Loan u/s 80E
§
Copy of Provisional Interest certification from
Bank/Financial Institution showing the interest and principle separately.
Rajiv Gandhi Equity Saving
Scheme (RGESS) u/s
80CCG
§
Demat Account Statement
§
Self declaration stating RGESS enabled
investments
Handicapped
dependent u/s 80DD
§
Amount paid or deposited under any scheme
framed in this behalf by the LIC or UTI or any other insurer and approved by
the Board for the maintenance of the handicapped dependent
§
Physical disability certificate from a
physician, a surgeon, or a psychiatrist, as the case may be, working in a Govt.
hospital. The certificate should contain the employee’s name and percentage of
Disability clearly.
§
Form 10-IA.
Medical
Treatment Expenses u/s 80DDB
§
Medical Bills / expenditure incurred by way of
medical treatment for a specified disease along with a certificate from a
hospital in the prescribed form.
§
Form 10-I
National Pension Scheme u/s 80CCD(1B)
§
Photo copy of deposit receipt or account
statement
Section
80C Deductions:
.No.
|
Investment Type
|
Documents as Investment Proof
|
1
|
Life Insurance Premium
|
Copy of Premium Receipt. Late payment fees will not be included as premium paid
For the premium falling due after submission
deadline, attach previous year’s receipt with declaration (Download: Declaration for Insurance Premium Payment)
|
2
|
Public
Provident Fund (PPF)
|
Copy of passbook/statement along with the
cover page showing investor’s name OR
Copy of the deposit challan duly acknowledged
by the Bank
|
3
|
Senior
Citizens’ Savings Scheme
|
Copy of passbook/statement along with the cover page showing
investor’s name OR
Copy of the deposit challan duly acknowledged by the Bank
|
4
|
NSC
|
Copy of the Certificates purchased during the
financial year
For accrued Interest on NSC – Copy of Certificates to be enclosed with date
of purchase and
the amount
|
5
|
ELSS (Tax Saving Mutual Fund)
|
Copy of Account Statement
|
6
|
Children’s Tuition Fees
|
Copy of receipts for Tuition Fees and Exam Fees (excluding Donations & Development fees, Bus / Transportation
charges, Text Books, Private Tuitions or Tutorial Fees) paid to
any
|
7
|
Sukanya
Samriddhi Yojana
|
Copy of passbook/statement along with the cover page showing
investor’s name OR
Copy of the deposit challan duly acknowledged
by the Bank
|
8
|
Pension Plan from Insurance Companies
|
Copy of Premium receipt
For premium falling due after Jan ’16. Please
attach previous year’s receipt with declaration (Download: Declaration for Insurance Premium Payment)
|
9
|
Post Office Tax Saving Term Deposit
|
Copy of deposit receipt
|
10
|
Tax
Saving Bank Fixed Deposits
|
Copy of Deposit Receipt OR Account Statement
|
Previous
Employment Details
In case
you were employed with another employer in the financial year you need to give
following documents:
§
Form
12B with
copy of Form 16 for F.Y 2015-16/ Latest / Full and Final Tax computation
statement submitted by you).
§
Copy of Form 16 for F.Y. 2015-16 / Latest /
Full and Final Tax computation statement certifying Earnings and Deductions
from your previous employer is mandatory.