The corporate world sees to it that with the expansion of the financial year 2024-2025, they should emphasize investment proof to employers numerous of them being salaried employees. Most organizations go through this process once a year to enable them to get the right tax deductions and to also get the correct calculation of taxable income.
Timely Submissions
To determine the right amount of TDS [Tax Deducted at Source], employers demand employees to provide proof of tax-saving investments and eligible expenses. If these proofs are not produced before the SFS [Summary Financial Statement] by the stipulated timeline then the TDS goes up thus less take-home pay per month.
Common Investment Proofs
Employees should gather and submit documentation for the following investments and expenses:
– Section 80C Investments: It covers deposits made to Provident Fund (PF), Public Provident Fund (PPF), National Savings Certificates (NSC), Life Insurance Premiums, Equity-Linked Savings Schemes (ELSS), Tuition Fee for Children.
– Section 80D: Medical insurance comprising of its cost for self, spouse, children and parents.
– Home Loan Interest and Principal Repayment: Interest on home loans availed for self-occupied property is allowed as a deduction under section 24(b) and repayment of principal part of home loans is allowed as deduction under section 80C.
– House Rent Allowance (HRA): A receipt of rent and the rental agreement are the documents that are acceptable in the context of claiming HRA exemptions.
Steps for Submission
- Collect Relevant Documents: Collect necessary documents including receipt, certificate or statement for any qualified investment and expenses.
- Verify Accuracy: Make certain all documents you complete are correct and reflect the current financial year.
- Submit to Employer: Remit the proofs of the payment to the employer’s payroll or Human Resource department before the set time expires.
- Retain Copies: The respective copies of all the documents submitted should also be retained for personal use and or future reference.
Consequences of non-submission:
Investment proofs must be produced within the given timeframe because if they are not provided, employers are compelled to subtract tax irrespective of more exception or reductions that might be allowed. This leads to a situation where TDS increases as a result affects the take home pay. Employees need to provide proofs while filing ITR for refund; however, if they want to avoid financial burden, it is wise to do it early enough.
Conclusion
The salaried employees should wake up from their slumber to ensure that they gather and present investment proofs which will enable them to be taxed reliefs. When taxed, timely submission enables the right computation of taxes to be made hence increase the amount taken home.