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Investment Proofs For Claiming Income Tax Deductions FY 2012-13

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Are you done with your investments to avail tax deductions this financial year? If yes, then you must know that submitting the proofs of your investments to your employer as evidence of your investment is equally important as making investments. In simple words, as a tax payer you are required to submit the proofs of your investment to your employer before the end of the financial year to make him deduct the right amount of tax (if any) out of your salary.

If you are a salaried employee then you must have been receiving intimations from your employer for the submission of the investment proofs. As per the income tax act 1961, employers deduct the tax out of the taxable income of the employee to submit the same to the government on behalf of the employees which is called as Tax Deducted At Source (TDS). To make right calculation of TDS, employer need to check what all deductions and exemptions are available to the employee as per the investments made by him.

To inform employer what all investment you as an employees will make, you are supposed to declare the proposed investments to the employer in the beginning of the financial year. Employees can declare any investment which offers tax deductions like House Rent Allowance (HRA), Leave Travel Allowance (LTA), Investments under section 80C etc.

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To get tax deductions against the investments or expenses made, tax payer will have to submit the proofs of the investments by February 15 else you will have to file your income tax return & have to wait for one year to get the refund from income tax department.

Making declaration of the investments is important as it helps employer to make calculation of the taxability of each employee. Based on the calculation employer determines how much tax to deduct and employer start deducting tax from the employees salary on monthly basis. On the other hand If employee wont make any declaration for the proposed investments then employer will deduct the due tax as per the current tax slab.

If you had propose investments and now if your tax saving investments are more than what you declared in the beginning of the FY, then your tax liability would go down, which means lower tax paid this year. On the other hand, if your tax saving investments are less than what you declared initially, then the tax benefit you got based on your proposed investments will be withdrawn and you will be liable to pay extra tax at the end of the year.

Investment Or Expense Proof That You Need To Submit To Get Tax Deduction/ Exemption?

Document proof that you need to submit to claim deductions and exemptions:-

    • Proofs to claim deductions under Section 80. (80C Tax Deductions)
    • Proof to claim HRA deduction : Monthly rental receipts in original for 3 months including latest rent paid.The receipt should have details like Landlord’s name & address, signature of the Landlord. (HRA Exemption)
    • Proof to claim LTA : Travel receipts (LTA Claim)
    • Proof to Claim deduction against home loan repayment & Interest : Home loan repayment certificates from Lender (Tax deduction Home Loans)

ALSO READ : Income Tax Benefits On Second Home Loan In India

  • For other income tax deductions like health insurance premium, education loan, donations etc.(Other Tax deductions)

Apart from declaring proposed investments & expenses and then submitting the proofs of investments to claim tax deductions an employee should also need to disclose other incomes like interest income, rental income, capital gains on shares etc. It is important for every employee to disclose other incomes as this will help employer calculate your taxable income considering all incomes, expenses & deductions. This will help employer deduct the right amount of tax out of your taxable income else you may land up paying extra tax at the end of the FY.

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2 comments

  1. How can I show details about other incomes?
    I have fixed deposits in sbi and also traded stocks.
    How to get profit or loss details from share? And do I need to show this to my employer?

    • Companies have there own policies & financial portals where they allow there employees to enter details about there investments and other incomes.
      Income from other sources are also taxable so you need to compute your taxability either by yourself or through some Accountant(CA) to enter the details at the time of filing your tax return.
      In case of Fixed Deposit, if your interest income is more than Rs 10,000 than your bank will deduct TDS.
      You can check with employer what all details do they need to compute your taxability and provide information accordingly.

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