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  • What to do if Investment Proofs Have not Been Submitted on Time?

    If you are an employee working for a certain organisation, you will by now be aware of the last date to submit your investment proofs and also the consequences of not doing so. For most companies, this date is 10 March as proactiveness ensures that no extra tax is deducted from an employee’s salary. In case you are not able to file submit your proofs during that time, increased TDS will be deducted from the pay that you receive in the month of March. However, in case you have not submitted your proofs for any given reason, there is still a way to save your taxes.

    Before heading towards the solution, it is important to understand why excess tax might get deducted from the salary of the month of March.

    Increased TDS Deduction in March

    TDS or tax deducted at source is essentially the amount of money that an employer is obligated to deduct from the employee’s salary at the time of disbursement. Section 192 of the Income Tax Act covers this provision making it a mandate for employers operating from every corner of the country. This is done by referring to the investment declaration that you might have made in the month of April that particular fiscal year. Usually, the accounts department of any organisation is held responsible for determining how much TDS is to be deducted. The actual submission of documents backing your investments happens during the month of March based on which tax computation is carried out. However, furnishing the accurate documents is of utmost importance in this matter. You are free to invest in any financial product that you know will save a chunk of your income, however, the amount of tax deducted will be wholly dependent on what documents you are submitting and not what you are declaring! Failure to furnish the proper documents is sure to impact the salary of your March which will be significantly lower than what usually hits your account.

    Partial Disclosure of Amount

    At times, you may forget to declare the whole sum of money for the qualifying amount for subsequent deductions to your employer. The amount could be your children’s tuition fees or money invested in equity-linked savings schemes (ELSS), specifically if you are taking the SIP route. Your total balance in a situation like this will still reflect in your ITR receipt so that you can claim your benefits accordingly.

    You will not lose Everything

    Even if the deduction of your TDS amount happens to you because of any number of reasons, you will still be able to claim your refunds back by declaring all your investments, expenditures, and deductions. However, you have to get this done when you are filing your tax return. Multiple elements such as HRA, ELSS, tax-saving fixed deposits, etc that fall under Section 80C can always be claimed back.

    The Income Tax Department will Need your Investment Proofs

    Your employer will invariably ask for your proofs of investment before any benefit is given out. In a similar fashion, when you are declaring your investments for a certain fiscal year, the IT department asks for proofs of the same in order to verify whether they are real or counterfeit.

    What do you have to lose

    Certain exemptions such as Leave Travel Allowance (LTA) and medical reimbursements cannot in fact be claimed back at the time of income tax return filing. These are a few elements that only your employer can provide, meaning you have to claim their benefits from your employer.

    The tax break provided under Leave Travel Allowance can be claimed by an individual for himself and also for his family members, provided the destination is in India itself. The LTA will be valid for 2 trips back and forth in the space of 4 consecutive calendar years.

    The rules and norms set by the Income tax department may vary widely from the company you are working for. Therefore, it is always advisable to obtain a better clarity before claiming exemption of any nature.

    Furthermore, if you are successfully able to furnish documents of your medical bills, you will be eligible for a reimbursement. In case you forget to do so, TDS will get deducted by your employer and claiming it while filing your income tax returns will not be an available option.

    You can, therefore, not only take the investment benefits that have not been reported to the organisation but can also invest in tax-saving products up until the month of March and claim subsequent returns!

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