Download the All in One TDS on Salary for Non-Govt Employees for Financial Year 2015-16 and Ass Yr 2016-17 [ This Excel Based utility can prepare at a time Tax Compute sheet + Individual Salary Sheet + Individual Salary Structure + Automatic HRA Exemption Calculation + Automatic Form 16 Part A&B and Part B for F.Y.2015-16 only for Non-Govt Employees]
Claim Income Tax Exemptions And Deductions After Passed the Finance Budget 2015 to the Salaried Persons
The deadline to file income tax return is closing. You might have got the form 16 from your employer. You may be in the hurry to complete this annual ritual. This year, you may be e-filing income tax yourself. The process has become easier. Even you don’t need to send ITR-V.
Are you sure about the tax deduction amount? Have you saved tax as much as possible? Is there not any chance to save more tax?
4 out
of 10 people have the opportunity to save tax before e-filing income tax return.
You may be also one of them. No, I am not talking about the tax saving
investment of the new financial year. You can still save tax on
the investments of previous financial year. As, there is a
probability of under reporting the tax deductions and exemptions.
The employers deduct tax
according to your income, exemptions and tax saving investments. For uniform
tax deductions throughout the year, the employers ask a tax declaration.
You state your insurance premium, ELSS, PPF and other tax saving investments.
In the month of January and February Employers again ask the investment proof
and rent receipts to calculate the final TDS on the basis of hard facts. This
is the time when you may be struggling for the proofs. Many tax saving
investments are done in the hurry. You have to meet the deadline given by the
employer. The total tax deduction is done on the basis of the given proof.
you
might miss the deadline. You might not produce proofs on
time. You may not get the receipt of term insurance on time. You may have invested in the PPF account just
before the end of the financial year. The tuition fees receipt may come
late. Or, you may find a good time to invest in ELSS after
the deadline. There may be many reasons of under reporting.
Did you also miss the bus of
tax saving? Not really. If you deserve to pay less tax, the proof submission
deadline can’t deprive you. What if, your employer has deducted excess tax, you
can claim income tax refund. The income tax filing is the
method to claim refund of excess tax.
Hence,
once again, you should review the tax liability. Write down all of
your tax saving investments and
expenses. Ponder over the tax exemptions. Were you eligible for more tax
exemptions? Here is the checklist to help you.
·
Did your
landlord increase the rent of the last few months, will this increase was
part of the HRA exemption?
·
Did you take an
insurance plan after the proof submission deadline?
·
Did you
contribute into the PPF account just before the end of the financial year?
·
Did you get the
receipt of tuition fees after the proof submission deadline?
·
Did you also
invest lumpsum amount in the ELSS in addition to thes ystematic investment plan (SIP)?
·
Have you gone
for the health check up after the deadline?
·
Is your home
loan approved after the deadline and EMI started before 31st march?
The reasons can be many. You
have to just think over it. A review of tax deductions and exemption can save tax. It is
to your benefit.
Fortunately, if you find any missed tax deduction or
exemption, you can ask for tax refund.
Path To Save More Tax
Think Beyond Form 16
You can cut excess tax while filing income tax
return. The income tax return is the mechanism to present the tax liability
with all the details. In this form, you have to tell about the income, the
applicable exemptions and tax saving deductions. The ITR utility calculates tax
according to the data given by you. It relies upon you.
To simplify the things your employer gives form 16.
The form 16 has all the details of your income, TDS and tax saving
exemptions and deductions.
The form 16 only helps in filing income tax
return. It is not the final word of your tax calculation. The income tax return
filed by you is final tax information from you.
No Need To Attach Any Proof
Do you want to add any extra tax deduction investment
in the income tax return? Are you thinking of sending the proof of extra
investment to the income tax department?
Just chill. The income tax department does not accept
any proof of investment. Neither, it accepts any proof with income tax return,
nor It accepts the proof from your employer. Rather, It is the responsibility
of your employer to maintain the record. If required, income tax department can
ask the record and proof.
As far as the investment proof after the deadline is
concerned, you need not to attach it with the income tax return. Indeed, It is
not possible with efiling.
Keep All The Records To Prove The Claimed Tax Exemption And Deductions
The tax department relies on your income tax
declaration and accepts your income tax return. But, if it finds any anomaly or
tax avoidance, the assessing officer can ask for the proofs. Nowadays, the
hi-tech system of income tax department can track all of your earning and
investment. Hence, if there is any suspicion, it can ask for proof. Therefore,
you should always keep the investment proof for 6 years. The tax department can
reopen the case of the last 6 years.
Don’t Misuse System To Avoid Tax
It seems enticing to file a false income tax return.
It can give heavy tax refunds.
But, please beware! Tax avoidance has become very
tough, therefore you should always give correct information in the ITR form. Be
truthful to avoid heavy penalty.
Take Note of the Financial Year
You can claim tax deduction on the investment done
after the proof submission deadline. But it does not mean you can also
count the investment done after the 31st March. Please take care of the
financial year before adding any investment in ITR forms.
You can Also Revise ITR
If for any reason, you misses
to report an investment in ITR form, you can report it further. You can file
revised income tax return. The extra investment can be incorporated in the revised income tax return.
Claiming Tax Refund Can’t Be A Norm, It Is a Suspicious Behaviour
The income tax return gives you the opportunity to
get back the excess taxes. But, It can’t be a regular practice. You should
not ask for tax refund every year. Although, technically there is nothing
wrong with repeated tax refund claims. But this type of behavior can
generate suspicion. You should not attract the tax official.
The Exemptions and Deductions You Can File In Income Tax Return Form
There are some exemption and deductions which are not
dependent upon the employer or form 16. You can give the information about the
exemption, you deemed correct.
House Rent Allowance exemption on your income tax return
House Rent allowance (HRA) exemption is a major tax
saver for salaried. Without the HRA, your tax liability increases
substantially. Therefore, you must take the tax benefit of HRA. This exemption
is available when the employee is living in a rented accommodation and
pays rent to the landlord.
But could you not submit the rent receipt before
deadline? Did your employer deduct tax on the HRA as well? You can claim this
exemption through the income tax return.
1.
To avail this
benefit through ITR, you need to calculate the HRA exemption available to you.
2.
You should
deduct the applicable HRA exemption from the taxable income.
3.
If you have
already availed some HRA exemption, you should only deduct the remaining
exemption.
The HRA exemption will reduce your total tax
liability, which in turn will give you a tax refund.
EPF Contribution
The EPF can be also claimed at the time of income tax
return filing. Since, the employer deducts this amount it self, there would be
a less chance to change in this amount. The PF contribution by you is eligible
for tax deduction under section 80C.
Life Insurance premium
The premium paid by you for life insurance for
yourself, your spouse or any child can be claimed as a deduction. The deduction
can be claimed for the full amount paid (premium including service tax &
other charges).
Children’s Tuition Fee Payment
Tuition fees paid by you for the education of your
children (maximum 2) are eligible for tax deduction under section 80C. If you
could not produce the receipt of fees paid, you can claim this expense with
income tax return.
Principal Repayments on Home Loan
The principal payment of a home loan is eligible for
tax deduction. You can mention it in the income tax return. The home loan
principal payment deduction is covered under section 80C.
Health Check-up
The health check-up is often missed. Under section
80D, you can claim tax deduction on the maximum expense of 5000 in a financial
year. The health check-up can be of your, spouse or children.
Exemption Can’t be Claimed In the Income Tax Return
You can’t claim each and every tax exemption through
the income tax return. There is some exemption, which needs the validation of
your employer.
LTA
Expenses on a trip against the LTA can only be
claimed via your employer. Because, it needs the authorization of the employer.
The unclaimed LTA can be carried forward to the next year.
Medical Reimbursement
Medical reimbursement requires original receipt. Only
your employer can claim tax exemption under this head. You can’t claim it
with the income tax return.
You have a flexibility to claim the tax deductions
and exemption with the income tax return. But never try to misuse it. The
advanced technology of the income tax department is keeping an eye on every
taxpayer. Also, you must keep the record of all the claimed exemptions or
deductions. So that you can produce it whenever the tax assessing officer asks.
