Guide for submitting investment proofs to your employer

The close of the financial year also means it is time for your employer to collect investment proofs. The income tax act has made it mandatory for employers to allow only those deductions for which proofs are submitted.

Submitting proofs helps your employer make a final adjustment of TDS in February and March salary. This way the employer makes sure appropriate TDS is deducted on your annual salary.

Here’s a quick guide to help you with submission of proofs.

Deduction/

Exemption

Maximum amount allowed Eligibility Documents to be submitted Whether deduction can be claimed directly in the tax return
Claim HRA exemption Based on HRA calculation You receive HRA

 

You pay rent

Rent Receipts

 

PAN of landlord if rent exceeds Rs 1,00,000 per annum

 

Rent agreement

 

 

Yes. If you have not been able to submit rent receipts to your employer timely, and you meet the eligibility criteria you can claim HRA directly in your tax return.

 

claim interest deduction

on home loan

Rs 2,00,000 for a self occupied property

 

OR

 

Entire interest for a rented property

You are an owner of a house property

 

You are a co-borrower in the home loan

 

You have paid interest

 

Interest certificate from lender

 

Amount of principal repayment (allowed under section 80C)

 

Address of the property

 

Yes. You can claim this deduction directly in your tax return.
Deductions under section 80C Rs 1,50,000 You have paid life insurance premium

 

Deposited in PPF

 

 

Purchased NSCs

 

 

Bought ELSS

 

 

Tuition Fees of Children

 

Sukanya Samridhi account investments

 

ULIPs investment

 

5 year Fixed Deposit

 

Principal repayment on home loan

 

Life insurance receipt

 

 

PPF deposit slip or updated PPF passbook

 

Copy of NSC certificates

 

ELSS statement from fund house

 

Fee receipts

 

 

Account statement

 

 

 

Premium receipt

 

 

Copy of FD or account statement

 

Certificate from lender

All these deductions can be claimed directly in your tax return
Medical Insurance

under section 80D

Rs 25,000 for insurance of self, spouse, kids

 

Rs 30,000 for insurance of parents

(for uninsured parents medical expenses of Rs 30,000 can be claimed)

Paid medical insurance premium

 

Paid for preventive Health Check-ups [Within these limits (Rs 25,000 and Rs 30,000) a deduction of maximum Rs 5,000 can be claimed for preventive health check-ups.]

Premium payment receipt or letter from insurer

 

Bills of preventive health check-ups.

 

 

Actual medical expenses bills of up to Rs 30,000 in case of parent who are uninsured and more than 80 years old.

 

 

This deduction can also be directly claimed in the tax return.
Donations under section 80G 100% deduction for amount paid

 

Or 50% deduction (as prescribed)

Donating to prescribed funds and institutions as per section 80G Donation receipt

 

Name of the Donee

 

PAN of the Donee

 

Address of the Donee

 

amount contributed

 

This deduction can also be directly claimed in your tax return
LTA Based on LTA as per CTC or salary letter LTA is provided as part of salary

 

For trips within India (foreign travel is not eligible)

 

2 journeys can be claimed in a block of 4 years. (We are currently on the 1st Jan 2014- 31 Dec 2017 block).

Tickets of travel This deduction is allowed via your employer and cannot be claimed directly in your tax return
Medical reimbursement Rs 15,000 Medical reimbursement is provided as part of salary. Actual medical bills, doctor receipts, medicine bills. This deduction can only be claimed via employer and is not allowed directly in your tax return.

 

If you have worked with more than one employer in the financial year, your employer may also ask for details of your income from previous employment. You may also have to resubmit documents for deductions. This helps your current employer calculate tax on your aggregate income and apply proper tax slab & rate.

Do note for deductions that are allowed directly in your tax return, no documents are required to be submitted to the income tax department. However, these must be kept safely in your records should the assessing officer ask for them later.

All the best with your proof submissions!

 

 

This article by www.cleartax.in was also published on yahoo finance on 26th January 2016.

 

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