The Financial Year end is round the corner, and shortly, all employees are required to submit the investment proofs for the year 2019-20.
Since the Income tax department made it very clear to all employers to verify the geniuses of each claim made by the employee (circular 1/2017), the document verification will be more stringent from the employers as considered to the previous periods. Employers have the right to define the guidelines in accordance, with more controls and riders, with the income tax rules, to safeguard the interest of the organization.
The Drawing and Disbursing Officers (Ddos) to Satisfy Themselves About The Genuineness of Claim:
The Drawing and Disbursing Officers should satisfy themselves about the actual deposits/ subscriptions / payments made by the employees, by calling for such particulars/ information as they deem necessary before allowing the aforesaid deductions. In case the DDO is not satisfied about the genuineness of the employee’s claim regarding any deposit/ subscription/ payment made by the employee, he should not allow the same, and the employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer
Key Points to Note on your tax saving investments as well your other investments:
- Calculate your tax liability before investing to know the scope of saving tax u/s 80C
- Check how much you have already contributed or need to contribute towards your existing commitments this financial year.
- Do not restrict tax saving, only to investing under Sec 80C
- Provident Fund covers a good amount of Tax saving under Sec 80C, review the other tools of investments too, investing amount over and above 1.5 lakh in tax saving schemes under Sec 80C may not be wise always.
- Connect your tax saving plans with your financial goals.
- Investment in National Pension Scheme individuals can claim an additional deduction of up to Rs 50,000 under Section 80CCD (1B), which is in addition to Rs 1.5 lakh permitted under Section 80C
Proof submission activity gives you the right opportunity to not only assess options u/s 80C, but also to go beyond and explore all possible tax saving strategies available to you within the Income Tax laws.
A generic guideline for the investment document submission is as follows, employers still have right to add more riders to it.
| Taxation Section | Guidelines |
| Rent Payments | Monthly rental receipts
Following information is mandatory in the rent receipt. Landlord’s name and address, signature of the Landlord. Landlord’s PAN or a self-declaration, in case the annual rent amount is greater than 1.0 lakh. Revenue stamp to be affixed for the cash payments. |
| Interest on Housing Loan- Self Occupied Property. | Interest certificate from the bank/financial institution with the total interest and principal paid/due for the FY.
Completion certificate of the house property from the builder or Self-declaration from the employee with the details of occupation. |
| Income / Loss from House Property- Let out Property | Interest certificate from the bank/financial institution with the total interest and principal paid/due for the FY.
Completion certificate of the house property from the builder or Self-declaration from the employee with the details of occupation. Detailed calculation of Let out income/loss. |
| Insurance Premium/ULIP/Pension scheme. | Premium receipts paid during current financial year, in name of self, spouse, children. |
| National Saving Certificate (NSC) | Copy of NSC certificate in the name of employee. |
| Public Provident Fund- PPF | Copy of the stamped deposit receipt, paid during current financial year or
Copy of the Passbook with clear mention as PPF Account. |
| Interest accrued on NSC deposited in the earlier FYs. | Copy of the NSC’s purchased in the previous FYs.
Interest accrued will be considered as other income too. |
| Tax Saving Mutual Funds | Copy of investment certificate with the employee name, Investment Date, Amount, Type of Investment.
Only the investments made under Tax Saving Fund / Plan will be considered |
| ELSS | Copy of investment certificate with the employee name, Investment Date, Amount, Type of Investment.
Only the investments made under Tax Saving Fund / Plan will be considered. |
| Children Tuition Fees. | Copy of Tuition Fees paid to educational institution.
Payment in nature of Donations, Capitation fees, Uniform fee, Sports fee, Van Fees, Shoes & Sock etc., are not allowed. |
| Principal Repayment of Housing Loan | Same as interest on housing loan mentioned above. |
| Post Office –Term Deposit with more than 5 year term. | Copy of deposit receipt. |
| Tax Saving Fixed Deposits with Scheduled Banks. | Copy of Deposit Receipt invested during current financial year, qualified benefit under Sec 80C of the Income Tax Act. |
| Mediclaim – Deduction u/s 80 D – including preventive health check up.
Employee, spouse, dependent children, and parents. |
Copy of premium receipt paid during the FY.
Receipt of payment of preventive health check-up of the employee or family. |
| Medical Treatment on Handicapped Dependant – Deduction U/S 80 DD
|
Proof of
a. Expenditure incurred towards medical treatment, training and rehabilitation of a handicapped dependent ., or b. 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 c. Form 10-IA. |
| Medical Treatment Expenses for the specified disease – Deduction 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 |
| Interest paid on Higher Education Loan – Deduction U/S 80E | Copy of Bank certificate stating that the loan and interest has been paid and amount payable during the financial year.
|
| Additional Deduction in respect of housing loan interest for the first house property acquired in FY 19-20 U/s 80EEA | Maximum deduction u/s 80EEA is interest payable on loan or Rs. 1,50,000 whichever is less
The deduction shall be subject to the following conditions: 1. Loan should be sanctioned during the Financial Year 2019-20 2. The Stamp Duty Value of the residential house property does not exceed 45 lakh rupees; 4. The assesse does not own any residential house property on the date of sanction of the loan. All proofs should be provided, as applicable for loss on house property. |
| Donations eligible U/s 80G | Donation receipt needs to be submitted to the employer. Employers may not consider all the Donations for taxation, hence employees have to consider the same at the time of filing their personal returns and have to claim the tax refund. |
| For Self – Permanent Disability – Deduction U/s 80 U
|
Any Individual suffering from a permanent physical disability (including blindness) or is subject to mental retardation, on the production of medical certificate from Government Hospital in the prescribed form and manner, along with a Return of Income, shall be allowed a deduction of Rs.75000/-. Where such assessee is a person with severe disability, a deduction of Rs.125,000/- can be claimed.
(Photocopy of certificate (Form – 10 IA) issued by the competent medical authority specifying the % of disability) |
| For Self – Permanent Disability – Deduction U/s 80 U | Form 10 I-A |
| NPS – 80CCD(1B) | Copy of the stamped deposit receipt, paid during current financial year and copy of the Passbook with clear mention as NPS Account. |
Employees who joined after 1st April 2017 to the current organization, are requested to submit their previous employment income and compute the consolidated tax liability for the year. In absence they will liable to pay the differential tax with 12% interest, while filing their personal return with income tax department.
(Benny Thadathil- [email protected])
(Republished with Amendments)
Author Bio
Whether the documents submitted through Emails to Disbursing authorities/ Banks are to be accepted for income Tax purpose?
Hi, I am Pvt Salaried and I have joined my Current Company on 4th April 2020 and at the time of Investment declaration i have wrongly mentioned my previous company salary detail and according to that my current company have calculated the Tax and deducted from my salary, Now i want to declare my investment detail again with correct detail , so plz guide that how can i declare my revised investment
I have asked to resign the company on May 2016. As compensation they will assured to give me severance amount INR 12.6 Lakhs. But unfortunately they didi not pay the same and after lots of fight now they are agreed to pay the amount which is taxable. Now my question is that When I asked company to considered my Investment declaration so that I can save Tax amount, but they told me that as on date I am not an employee so they can not considered my Investment declaration. They told me you can refund the amount at the time of IT return. My question is is this correct?
How to declare PPF interest & S.B a/c interest for the full Financial Year to the Employer as these are credited at the end of Financial Year
My employer takes investment proofs in January. So. One cannot submit the proofs for investments to be made in Feb and March of the same financial year. How to include those investments?
Hi,
Please note Landlord PAN is mandatory if the annual rent amount is greater than 1.0 lakh.
Investment in PPF ac of wife is considered as deduction.
FOR PENSIONERS HOW THESE CAN BE IMPLEMENTED
FOR INTEREST ON SB ACCOUNTS( MORE THAN 10000) HOW IT WILL BE CONSIDERED SINCE MANY BANKS GIVE INTEREST TOWARDS THE LAST MONTH
Provide Auto Income tax Calculation in excel for F.Y. 2017-18 through feeding of Pay Particulars.
provide complete list of allowances exempt either fully or otherwise
I request the author to IMMEDIATELY CORRECT the position with regard to 80DDB – treatment for handicapped dependents. As per instructions, it IS SUFFICIENT if there is a mere declaration of having incurred expenditure towards treatment/ training/rehabilitation. ONLY if an investment is made in SPECIFIED SCHEMES, there occurs necessity for submission of proof thereof. Kindly issue necessary clarification to avoid harassment of parents/caretakers of handicapped by employers .
disposable income in the hands of the workers dependent on salaries is insufficient to think of investments and savings in the eligible options under the act. let there be weighted average fixed tax rate recoverable at disbursement of salary from employer for income slabs and avoid cumbersome process of savings and investments which is beyond reach of workers in private sector who do not have untaxable income from corruption
since the tax slab is not revised significantly, repayment of education loan and personal loans from banks and private lenders,nbfc;s etc – principal+interest along with credit card repayments should be provided as deduction in income form salaries since for majority of work force, the meager salaries are grossly inadequate to meet the cost of living , education of dependents and family support day to day expenses, rents, kirana, conveyance, utilities, maid services are beyond control and forcing the work force to depend on loan funds and credit cards and credit facilities for all needs.
Can employer store the investment documents in soft copy? Is it permissible as per IT rules?
I had paid off my higher education loan in the year 2013-2014. However, the same was not submitted for IT returns. Can I include the same to get the returns in FY 2015-2016?
If I work in Pune by staying temporary hotels and I am paying rent for My house in Bangalore where my family stays and I will go home 3days week, then shall I claim HRA for the rent I paid in Bangalore, which is my official recidence.
No, interest can be claimed only after occupation of the house.
Pre-emi can be claimed over 5 years from the year of occupation.
I’m paying Pre-EMI of house loan, is it also an exemption in income tax return