Since April of last year, your company's account department would have been computing taxes on your salary based on the proposed investment declaration submitted by you in earlier in the financial year.
The taxes deducted at source (TDS) are covered under Section 192 of the Income-tax Act, 1961 making it the obligation of the employer to withhold taxes at the time of payment of salaries.
Remember, for FY 2020-21, an individual salaried person has an option to choose between the new tax regime and old or existing tax regime. If an individual has opted for the new tax regime, then an individual is not required to submit any document or investment proofs to the employer. On the other hand, if an individual has opted for old or existing tax regime, then investment proofs must be submitted before the deadline specified by your employer to avoid higher taxes.
Individuals, opting for new tax regime, do keep in mind that the contribution to your NPS account by your employer has been taken into account while computing taxes on your salary. Deduction under section 80CCD (2) of the Income-tax Act is available under both the tax regimes.
You must keep in mind that for FY 2020-21 there is no tax payable if your taxable income does not exceed Rs 5 lakh in both the tax regimes. Therefore, if no tax has been deducted by your employer till now, on the basis of investment declaration, then it is more important to submit tax-saving proofs so that excess TDS is not cut.
Once the actual proof is submitted, the accounts department will compute the taxes based on the proofs of the actual investments made by you. And for that, you will have to furnish the documentary evidence of having actually made the investments as per the investment declaration made earlier.
You can make tax-saving investments different from those declared by you earlier but the deduction from taxable income will be given only on the basis of the actuals submitted and not on the basis of the proposed declaration made earlier.
The last date for such submissions varies, but most organisations would expect you to submit them by March 10, 2021. However, employers start asking for them in January itself as they would like to start deducting tax at source on the basis of tax calculations based on actual investments from January.
This will also enable the employee to finalise tax adjustments, if any, in the balance months of the current financial year (2020-21). If taxes have been deducted in excess or less, accordingly, they will get deducted in the last 3 months of the FY. Do not wait till March as then there won't be any scope for finalising and one could see a huge tax burden in that month and less of take-home pay.
The documents need not be attached or sent to the income-tax department at the time of tax filing. Instead, it's the employer who has to receive them from employees and deduct tax accordingly.
At times it is found that after taking into account the tax-saving investments/expenditures, the tax already deducted by one's employer is in excess and cannot be adjusted in subsequent months. In such cases, the excess TDS will reflect in Form 16 of an employee and the refund will have to be claimed by you from the income tax department by filing the income tax return.
The important tax-saving investment/expenditure proofs include:
- Investments - Under Section 80C
- Tax-saving on affordable house
There are certain criteria one must satisfy in order to avail the tax-benefit which are as follows:
a) Loan must be sanctioned by a financial institution during FY 2020-21, i.e., between April 1, 2020, and March 31, 2021.
b) The stamp value duty of house should not exceed Rs 45 lakh
c) Individual should not own any other house property on the date of sanction of loan
d) An individual should not be eligible to claim deduction under section 80EE (mentioned below)
- First-time home buyers
- House Rent Allowance (HRA) Exemption
A copy of the lease rent agreement or declaration by the landlord in a prescribed format is to be submitted. Further, ownership proof of landlord of rented premises, which can be house tax receipt or the latest electricity bill or share certificate in case of co-operative society houses has to be submitted. The original rent receipts for the period of April 2020 till date have to be provided.
- Housing loan repayment (principal)
- Loss from housing property - interest on housing loan - self occupied
- Loss from housing property - interest on housing loan - let out on rent
- New Pension System (NPS)
It's better to get a confirmation on the actual requirement from your accounts department. Not all will be asking for all the above-mentioned documents, while few others might have their own set of requirements. The documents, if not submitted within time, may make you end up with excess TDS which would have to be claimed as refund. Also, as a precaution, retain the original/photocopies for personal income-tax assessment, as the case may be.
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22 Comments on this Story
PLANFIN PLANFIN13 days ago
it's National Pension system not New Pension system
COSMIC ASTRO337 days ago
TAX evasion on the part of Doctors' lawyers will remain unabated since long as Big hospitals will collect doctors fees in cash and manually. All public should insist fir e- payment for doctors and lawyers fees.All patriotic will campaign on it.
Hari Saran735 days ago
Ram ,no need of landlord pan of u claim HRA less than 1 Lac per year