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 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?
- 1 Why Employers Ask for Tax Saving Investment Proofs?
- 2 When does Employer ask for Proofs?
- 3 What if you do not Submit the Proofs?
- 4 Documents to be Submitted
- 4.1 House Rent Allowance (HRA) u/s 10(13A)
- 4.2 Home Loan Interest u/s 24
- 4.3 Medical Insurance Premium u/s 80D
- 4.4 Interest on Repayment of Education Loan u/s 80E
- 4.5 Rajiv Gandhi Equity Saving Scheme (RGESS) u/s 80CCG
- 4.6 Handicapped dependent u/s 80DD
- 4.7 Medical Treatment Expenses u/s 80DDB
- 4.8 National Pension Scheme u/s 80CCD(1B)
- 4.9 Section 80C Deductions:
- 4.10 Previous Employment Details
- 5 Useful Tips:
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.
Also Read: Check if you took advantage of all Tax Saving Sections!
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.
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.
House Rent Allowance (HRA) 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). You can generate rent receipts online now!
- 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.
Also Read: Not getting HRA? you can still claim Tax Benefit for Rent Paid u/s 80GG
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 & PAN Number of Bank/financial institution
- 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
Also Read: Can HRA & home loan tax benefit be claimed at the same time?
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
Also Read: Making Sense of Tax Benefit on Health Insurance u/s 80D
Interest on Repayment of Education Loan u/s 80E
- Copy of Provisional Interest certification from Bank/Financial Institution showing the interest and principle separately. (Read: All about Tax benefit on Education Loan)
Rajiv Gandhi Equity Saving Scheme (RGESS) u/s 80CCG
- Demat Account Statement
- Self declaration stating RGESS enabled investments
Also Read: All about RGESS
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 of NPS (Read: Should you Invest Rs 50,000 in NPS to Save Tax u/s 80CCD (1B)?)
Section 80C Deductions:
The table below gives the list of documents to be submitted to get tax benefit u/s 80C
Also Read: 15 Investments to Save Tax u/s 80C – Which is the Best?
|S.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 ORCopy 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 ORCopy of the deposit challan duly acknowledged by the Bank|
|4||NSC||Copy of the NSC Passbook purchased during the financial yearFor accrued Interest on NSC – Copy of Certificates/Passbook 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 University/College/School or Other Educational Institution in India during the current year for a maximum of 2 children.|
|7||Sukanya Samriddhi Yojana||Copy of passbook/statement along with the cover page showing investor’s name ORCopy of the deposit challan duly acknowledged by the Bank|
|8||Pension Plan from Insurance Companies||Copy of Premium receiptFor 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:
- Copy of latest Form 16 / Full and Final Tax computation statement certifying Earnings and Deductions from your previous employer
1. Last date of submission of investment proofs differs employer to employer. You will get to know the last date by your employer.
2. In case you have not utilized your deduction limit u/s 80C to 80U, you can do so by March 31, 2018 and can claim the same at the time of filing ITR.
3. It is always advisable to start your tax planning at the beginning of financial year and avoid rushing at the last minute making poor investments.
4. Always keep a copy of the documents you submit to your employer.
Also Read: When and How can Tax Benefits Claimed Earlier be Reversed?
5. You need not submit these documents while filing your income tax returns. However I-T department can investigate any tax returns for up to 6 years. So you should always file and maintain these physical records for 7 years.
6. LTA & Medical Reimbursement can be claimed only by submitting relevant proofs to your employer. You cannot claim these tax benefits while filing tax returns.
7. Other than the above you can claim all tax benefits while filing your tax returns, so if there is a dispute with employer for certain investment, you can claim the same while filing tax returns.
This post would help you to keep the relevant documents while making your tax saving investments.
4 thoughts on “Submitting Income Tax Proof to Employer – Guidelines, Dos & Don’ts”
this is indeed helpful
helps employees & employers both
Can you please show us filled form10IA?
I didn’t find anywhere filled form for reference.
How much amount will be considered If I am having ELSS SIP for 10k. As I am able to give account Statement till Jan -2016. What about SIP amount of Fen-2016 & March-2016 ?
Your employer would consider only ELSS investment till January. Most employers do provide window in Feb/March again to update any investment made in those months. You can talk to your HR/Accounts department for further information.
Anyway even if your employer is not able to give tax benefit for Feb/march investment you can do so while filing your Income Tax return.