CA Kumar Gaurav
According to the income tax guidelines, income tax is deductible annually for each financial year commencing from 1st of April and ending on the 31st March. The responsibility of the employer has been affixed by the Income tax Department to deduct income tax from the salary of employees monthly on proportionate basis and deposit before the due date ( Monthly) as prescribed and report same to Income tax Department (quarterly as well as annually). The aggregate tax calculated on the estimated projected income will be deducted proportionately in 12 months, thus the assessment needs to be done on at the start of the year.
Therefore, all employees are requested to declare their proposed investments for financial year 2016–17 ,so that proportionate income tax could be calculated & systematic deducted from the salary can be started early
It has to be noted that only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assesse subject to the limits laid down in Rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax.
There were various anomaly as well as ambiguity in relation to declaration as well as the submission of details and supporting so CBDT issued Form No 12BB so as to standardize same.
Key Deductions and their respective details
| PARTICULARS | MAX BENEFIT PERMISSIBLE (RS.) | REMARKS | ||
| Life Insurance Premium | Maximum amount eligible for Deduction under section 80C & 80CCC Categories is Rs.1,50,000/- | Self , Spouse & Children only | Copy of Premium Payment Receipt | |
| Public Provident Fund (PPF) | Self , Spouse & Children only, Submit PPF challan or PPF passbook front page with entries | Copy of Payment Receipt / Passbook | ||
| Provident Fund (PF) | Deducted from salary | EPF No If any To be mentioned | ||
| Pension Fund Contribution | Self only | Copy of Premium Payment Receipt | ||
| National Savings Certificate (NSC) | Self only | Copy of NSS Certificate/s | ||
| Interest Accrued on NSC (Reinvested) | Self only | Copy of NSS Certificate/s | ||
| Unit Linked Insurance Policy (ULIP) | Self , Spouse & Children only | Statement of Holding along With Purchase dates | ||
| ELSS or a Specified Tax Saver Plan (Lock in period of 3 years) | Self only | Statement of Holding along With Purchase dates | ||
| Payment of Tuition fees for Children (Max 2 Children) for Full Time Education only. | Two children only | Copy of Payment Receipt from School | ||
| Sukanya Samriddhi Account (SSY) | Only Girl Children | Copy of Payment Receipt / Passbook | ||
| Principal repayment of Housing Loan | Self & Joint a/c holder | Certificate from Bank / Financial Institution | ||
| Registration charges incurred for Buying House (I year Only) | Self only | Copy of Stamp Duty Paid/ Copy of Registration | ||
| Scheduled Bank Fixed Deposit for 5 Years & above | Self only, Stipulated Bank Stamp Required Marked as “for Income Tax purpose only” |
Copy of FD Receipt | ||
| Term Deposit for 5 years & above |
| PARTICULARS | MAXIMUM LIMIT (RS.) | REMARKS | Documents Required |
| Sec. 80CCD (1B) National Pension Scheme |
Rs. 50000/- | Amount contributed to National Pension Scheme by employee | Copy of Payment Receipt / Passbook |
| Sec 80D (Medi Claim Policy & Preventive health check up) (Overall limit proposed in Budget 2016 – Rs.30000/-) |
Rs. 25000/- (or) Rs.30000/-) | Medical Insurance Premium PAID by Employee: – on the health of employee, spouse, and dependent children (Payment must be made by cheque only). [Rs.30,000/- In case employee is a Senior Citizen] (i.e., 60 years or more). Payment made by an employee for preventive health check-up of self, spouse, dependent children during the financial year is eligible for maximum deduction of Rs 5000. The amount paid is within the overall limits ( Rs.25000/Rs.30000) |
Mediclaim Policy Copy or Premium Certificate/ Original Medical Bills for preventive Checkup ( Payment has to be Made by Cheque Only |
| Rs. 25000/- (or) Rs.30000/-) | Medical Insurance Premium PAID by Employee: – on the health of parents (even not dependent on employee) (Payment must be made by Cheque only). [Rs.30,000/- In the case parents are Senior Citizen]i.e., 60 years or more payment made by an employee for preventive health check-up of parents during the financial year is eligible for maximum deduction of Rs 5000. The amount paid is within the overall limits ( Rs.25000/Rs 30000). |
Mediclaim Policy Copy or Premium Certificate/ Original Medical Bills for preventive Checkup ( Payment has to be Made by Cheque Only | |
| Sec 80DD (Maintenance including Medical treatment of dependent person with disability) | Rs. 75,000/- and Rs. 1,25,000 for severe disability) | Here Employee gets fixed amount of deduction. If employee has incurred any expenditure / deposited in specified policy. |
Certificate from Prescribed Authority in Form No. 10-I Sec. 80 DDB |
| Sec 80E (Education Loan) Please mention Initial Year (Year in which Interest payment started)___________________ |
No limit (only Interest Portion) |
Interest on Loan taken for Higher Education: Amount paid by employee during the financial year on loan taken for higher education of – Employee, spouse or children of employee or students for whom employee is a legal guardian Benefit Period: Upto 8 years from initial year |
Certificate from Bank / Financial Institution |
| Donations | Under Section 80G | Receipt should have Name, Pan No of donee and section under which the benefit is available.( Subject Various Limits & Exclusions ) | Copy of PAN Card of Institutions, Copy Of Cheque, Bank Statement Reflecting Clearing of Cheque, Original Receipts ( Duly Stamped and Approved, with Full Details of Validty of 80G exemptions, address,etc) |
| Sec 80U (For person with a disability) | 75,000/- and Rs. 1,25,000 for severe disability) | Here Employee gets fixed amount of deduction. | Certificate from Prescribed Authority in Form No. 10-I Sec. 80 DDB |
| PARTICULARS | Please Fill in | Remarks | Documents Required | |
| Rent Paid / Payable for: | Complete Details of the Accommodation | Please enter your Monthly Rent details as per the Rent Receipt / Lease Deed, with necessary details as Tenant Name, Owner name, rented property address, PAN no of owner, payment details, revenue stamp. Note:- |
Original Rent Receipts every month (with Revenue Stamp if amount paid is above Rs. 4999/-) and Rent Agreement. Receipt should contain PAN of Landlord if Rent for the year exceeds 8300/ p.m. Copy of Landlord PAN and Registered Lease agreement Copy of Rent Paid Exceed 8300 p.m. | |
| April 16 | ||||
| May 16 | Name of Landlord | |||
| June 16 | ||||
| July 16 | ||||
| August 16 | Address of Landlord | |||
| September 16 | ||||
| October 16 | ||||
| November 16 | ||||
| December 16 | PAN of Landlord | |||
| January 17 | ||||
| February 17 | ||||
| March 17 | ||||
| TOTAL | Sum of 12 Months mentioned Above | |||
| Medical Bill Reimbursement | 1250/- every month | Applicable upto the extent of the CTC/ Gross Salary Component, if any | Original Medical Bills (including Parents, Wife/Husband, Children) | |
| Medical Expenditure for Parents (Very Senior Citizen) (not having Mediclaim Policy) -80D | Rs.30000 | Applicable upto the extent of the CTC/ Gross Salary Component, if any | Original Medical Bills |
| PARTICULARS | MAXIMUM LIMIT (RS.) | REMARKS | Dcouments Required |
| Interest on Housing Loan u/s 24 (If the house is self occupied and the loan was taken before April 1999). Bankers Certificate to be submitted |
Upto Rs. 30000/- (If Self Occupied) |
Please fill attached House Property Declaration form and it is COMPULSORY for claiming the deduction. | Certificate from Bank / Financial Institution |
| Interest on Housing Loan u/s 24 (If the house is self occupied and the loan was taken on or after April 1999). Bankers Certificate to be submitted |
Max Limit – Rs. 2,00,000/- (If Self Occupied) |
Please fill attached House Property Declaration form and it is COMPULSORY for claiming the deduction. | Certificate from Bank / Financial Institution |
| Interest on Housing Loan u/s 24 (Let out/ Deemed to be let out) Bankers Certificate to be submitted [if the property is LET OUT/DEEMED LET OUT – Actual Rental Income OR Gross Annual Value MUST be specified] |
– No Limit – (If Let Out) |
Please fill attached House Property Declaration form and it is COMPULSORY for claiming the deduction. | Certificate from Bank / Financial Institution |
Download format of Investment Declaration for FY 2016-17 for Salaried Employees
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Need some inputs on reimbursements to employee which is shown under gross pay for tax exemption
How to give declaration housing loan showing my wifes IT return i have to submit declaration i have not use housing loan in my tax exemption.
Helpful Notes provided by Tax Guru Thanks. i wish to you please provide “how to fill Income tax online” knowledge. it’s very useful for us (i:e- salary employee).
Thanks..
Very useful, thanks a lot
thnx a lot for the sharing
happy to see you on Taxguru sir. First of All I congratulate for valuable and on of the important aspect under Income Tax Act. It will surely bring awareness among employee to disclose correctly to employer.
Extremely fine defined
The Table does NOT include Senior Citizen Savings Scheme in POST OFFICES. They are also elgible for deduction.
Is the Form 12BB required to be obtained in April for estimating the salary or is it only for submission of actual proofs. In the Form 12BB, there is a mention of Rent details but not rent receipts, does this mean employers need not collect the receipt. Also if 12BB is annual, how is LTA going to be addressed, it is possible that employee can claim LTA during the financial year…does this mean, employer has to collect 12BB for LTA separately and for Actual investment proofs separately at the year end….