Income Tax Declaration and Investment Proofs

Posted on Posted in 80 C, 80 D, Income Tax, Insurance, Investments

Income Tax Declaration and Investment Proofs: The current financial year has just commenced and it is the time for each and every employer to submit their investment proofs. At the commencement of every financial year or at the time of joining a company, the employee must submit an ‘Income Tax Declaration’ to their respective employers. In the Income Tax declaration, you need to mention all the details regarding your planned savings and expenses considered as the deductions in Income Tax. At the end of every financial year, the employee must provide the supporting investment proofs regarding your Income Tax declaration.

In general, the employers of most of the companies ask for the investment proofs from the employees in the period between January and February every year. Depending on the planned savings and expenses, the employer takes away the Tax Deduction at Source (TDS) from their monthly salary and credits to the account of the government. In order to calculate the TDS, the employer takes into consideration all the declared investments and other expenses that the tax exempted for the tax deduction under the act of Income Tax.

Need of Submission of Income Tax Declaration

All the employees must and should submit their Income tax declaration along with the investment proof documents to the employer. If the employee does not submit the essential investment proofs at the end of the year, the employer compelled to deduct full tax without the consideration of provisional investments.

The Income Tax department has passed a new rule that the employers must verify the authenticity that the employees claim their Income Tax Declaration. The employers must verify the investment proofs of each and every employee in a strict way.

Income Tax Declaration and Investment Proofs

Income Tax Deductions & Deductible Allowances – List of Investment Proofs

Check out the list of various investment proofs that the employers accept to claim the income tax exemptions and allowances:

Section 80C: The employees can submit the following investment proofs so as to claim the tax deductions under section 80c:

  • The employees can submit their Life Insurance Premium Paid receipts if they have life insurance policy. The receipts must be in the name of the employee’s children, wife, husband or the concerned employee.
  • You need to submit the passbook copy of Public Provident Fund that the employee paid previously for the current financial year.
  • You can also place the receipts of the tuition fee of the children. You cannot include the fee of uniform, donation, maintenance fee and another traveling fee.
  • You need to place the copy of different certificates and receipts that include NSC, bank deposit post office term deposit receipt and another account passbook.
  • Mutual Fund statement
  • Submit the Home loan statement from the respective bank regarding the EMIs.
  • You can also include other expenses like stamp duty, registration fee, brokerage expenses as a deduction.

Section 80D: Under this section, you can submit the copy of the premium receipt that the employee paid it during the Financial Year. The employees can also submit various receipts regarding their health checkups.

Section 24B: You can also submit the whole interest paid on behalf of your home loan during the current financial year.

  • You can submit the loan statement of the interest certificate from the bank officer or the provider of home loan.
  • You need to provide the certificate of occupancy or the certificate of completion.
  • If the house is self-occupied, you need to submit the self-declaration.

Income Tax Declaration and Investment Proofs

HRA (House Rent Allowance): Under this section, the employees can submit their monthly rent receipts and other rental agreement. The employees must ensure that the receipts comprise of the name of the landlord, address, and the valid signature. If you pay the house rent more than 1 lakh per year, you need to place the PAN number of the landlord in the investment proof. If you pay the rent in the form of cash, you need to affix the revenue stamp on the receipts.

LTA (Leave Travel Allowance): The employees can also submit the bills of travel tickets when you travel long distances through the employer of your company. The employees can claim the Leave Travel Allowance for two times in a period of 4 years. If you don’t make use of the LTA for one year, you can carry it forward to the successive year. In that case, you can request the employer not to deduct the tax for LTA and let them claim it for the next year.

Education Loan (Section 80E): The employees need to submit a copy of loan certificate that replicates the interest payments.

Donations (Section 80G): As the proof of Income Tax declaration, the employees can place the receipts of donations as proofs. All the donations that you give to specific organizations come under the TDS. You can submit the receipts for such donations. But, you need to make sure that the donations receipts are acceptable only if the donation exceeds Rs. 10000.

Medical Allowances: There is a great difference between medical reimbursement allowance and media claim expenses. The employer provides the Medical allowance and it is the part of the employment agreement between the employer and the employee. You need to submit the original medical bills along with the prescription copies from the doctor. We can also exempt the medical reimbursement allowance under Section 10 of the Income Tax Act.

Medical Treatment on handicapped dependent (Section 80DD): You can submit the copies of medical bills and accordingly completed Form 10-IA h.

Medical treatment expenses for the specified disease (Section 80DDB): If you need to get treatment for specific bills, the amount you spend on it and the expenditure, you can submit the respective bills. Along with the bills, you need to submit the certificate that the hospital provides in the prescribed form. It is quite mandatory for all the employees to submit the certificate and the prescription from the doctor. The Central Board of Direct Taxes (CBDT) has issued a new notification regarding this condition that the specialist doctors who work in Private hospitals can issue a certificate.

NPS Contributions (Section 80CCD): You need to submit the copy of stamped deposit receipt that the employee paid in the current financial year. You must submit the copy of the Passbook mentioning it as NPS (National Pension System) Account.

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