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Everything About Submission of Investment Proof To Your Employer

Updated on: 15 Jan, 2025 04:43 PM

As the financial year is about to end, we again have to buckle up for the investments and savings to keep our future secure. But before you buckle up for this year, have you submitted proofs of the investment (investment proof) for the FY 2024-25?

This guide will help you learn about the various aspects of investment proof submission. Let's understand what documents you need to submit at the end of FY 2024-25 to your employer to get tax relief.

What is an Investment Proof?

Employees must submit an investment declaration using the prescribed form upon joining an organization and at the beginning of each financial year, typically in February or March.

This declaration includes details of all investments made by the employee during the financial year. Employers use this information to calculate and deduct Tax Deducted at Source (TDS), which is then deposited with the Government within the specified due dates.

To maximize tax savings, employees should consider five key factors before submitting their investment proofs. Timely submission of accurate proofs is crucial to ensure maximum tax benefits.


Key Points to Keep in Mind While Submitting Tax Investment Proof

Investment declaration proof must be submitted carefully to avoid any rejection of the claim by the employer.

  • Check how much you have contributed or still need to contribute for the investments shown in the form 12BB.
  • Do not limit tax savings to Section 80C. There are other tools of investment, too.
  • Explore all tax-saving strategies available to you
  • Ensure that you have copies of all the investment documents. Also, ensure that all the documents are self-attested and match your PAN records.
  • Amounts in your proofs must match your claimed documents.

For What tax-saving Investments the Declaration shall be Made?

Given below are the tax-saving investment declarations that you need to make for different tax-saving investments -

  • Housing Loan:
    • Interest certificate from the bank/financial institution
    • Completion certificate of the house property from the builder or self-declaration by the employee
  • ELSS Mutual Fund:
    • Copy of the investment certificate
  • Public Provident Fund (PPF):
    • Stamped deposit receipt or passbook mentioning the PPF account
  • Life Insurance Policy:
    • Receipts for premiums paid towards life insurance
  • House Rent Allowance (HRA):
    • Monthly rent receipts
    • PAN card of the landlord
    • Revenue stamps for cash payments above ₹1,00,000
  • National Savings Certificate (NSC):
    • Copy of the NSC certificate in the name of the employee
  • Tax-saving Fixed Deposits (FDs):
    • Copy of the deposit receipt
  • Tuition Fees for Children:
    • Copy of tuition fee receipts paid to educational institutions
  • Post Office Term Deposit (5 Years):
    • Copy of the deposit receipt
  • Preventive Health Check-ups (Section 80D):
    • Copy of the premium receipt
    • Bills for preventive health check-ups
  • Medical Expenses for Handicapped Dependents (Section 80DD):
    • Proof of medical expenses, training, and rehabilitation costs
    • Form 10-1A
  • Interest Paid on Higher Education Loan:
    • Bank certificate mentioning the principal and interest amount paid
  • House Loan for First-time Buyers (Section 80EEA):
    • Proof of interest paid for loans taken to purchase a new home
  • Deduction for Disabilities (Section 80U):
    • Medical certificate
    • Certificate Form 10-1A from a competent medical authority
  • Donations (Section 80G):
    • Valid donation receipts in the employee's name

Why should you Submit Proof of Investment?

Employees can reduce their taxable income by submitting proof of investment. Employees can take advantage of tax rebates by submitting relevant proof for TDS deduction.

Employers must calculate an employee’s taxable salary accurately to deduct the correct amount of tax. This is a standard process, as employers are responsible for deducting tax from employees' salaries.

To facilitate accurate tax deductions, employees need to provide a clear and complete overview of their income, investments, and tax-saving efforts, supported by relevant documents. These tax-saving instruments typically include allowances and reimbursements such as HRA, LTA, medical reimbursements, and other entitlements provided by the employer.

It is essential to submit the necessary details and supporting documents to help the employer determine the appropriate taxable amount and ensure correct tax deduction.


What if you failed to submit proof?

If you have not submitted proof of your investment and your employer has deducted excess TDS, then you can claim a refund for the extra TDS deducted by filing your income tax return.

Employees opting for the old tax regime must submit proof of their tax-saving investments and expenditures to their employer to ensure accurate calculation of Tax Deducted at Source (TDS). Failure to provide these documents may result in the employer deducting the full tax amount from the employee's salary, particularly in the last three months of the financial year.

Employers typically request employees to submit investment proofs in the final quarter of the financial year to adjust TDS calculations accordingly. Timely submission of these documents is crucial to avoid higher tax deductions.

Form 16, issued by the employer as a TDS certificate, does not reflect deductions and exemptions available to the employee if the employer does not have your investment proofs. While individuals can claim the deductions and exemptions at the time of filing ITR, certain exemptions such as LTA can only be claimed through the employer. Therefore failing to provide investment proofs can lead to missing out of certai tax benefits.

Don’t miss out on tax savings and claim your refund. Fill out form 12BB online to maximize your tax refund. Submit Form 12BB Online Today!


What is the Due Date for Submitting the Investment Proof for FY 2024-25?

The due date for submitting investment proof for FY 2024-25 to your employer typically falls within the timeframe of late January to early March. However, the exact date can vary depending on your employer's internal policies.

If you have not submitted your investment proofs till now or are too confused as to which investment proofs to submit, you can get help from Tax2win’s tax experts, who ensure that you receive a maximum tax refund and stay tax-compliant. Book eCA Now!


Frequently Asked Questions

Q- What is investment proof submission?

Submitting investment proofs involves providing documents that confirm yearly expenses such as house rent and planned financial investments. These documents, referred to as Proof of Investment (POI), enable employers to verify an employee's declared investments and calculate tax deductions accurately.


Q- How do I submit an investment declaration?

To submit an investment declaration, you must complete Form 12BB, a self-declaration form. This form is provided to your employer or accounts department to calculate Tax Deducted at Source (TDS) accurately. Submitting Form 12BB is essential for claiming tax benefits and is typically required at the start of the financial year.


Q- What happens if I miss the investment proof submission?

Missing the deadline for submitting investment proofs may result in higher TDS deductions from your March salary. However, you can still claim tax benefits while filing your income tax return. By providing details of your tax-saving investments during the ITR process, you can request a refund for the excess TDS deducted and minimize any financial impact.


Q- Is 80C applicable in the new regime?

The new tax regime differs from the old/existing regime as it does not permit most deductions and exemptions. Taxpayers opting for the new regime's tax slab rates cannot claim deductions under Section 80C.


Q- Which tax regime is better for 15 lakhs?

For a salary above ₹15 lakhs, opting for the old tax regime and maximizing all available deductions and exemptions is generally the preferred strategy for effective tax savings.


Q- What happens if tax has been overpaid due to the non-submission of investment proof earlier?

If employees fail to submit investment proofs on time, their TDS will be deducted in excess. However, they can claim a refund of the excess amount when filing their Income Tax Return (ITR) by submitting the required proofs during the filing process.


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.