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If you are a salaried employee, it is high time that you submit your investment proofs to save yourself from being prey to higher TDS deductions by your employer. At the beginning of the financial year, employees are required to submit a declaration of the expected investments they will make during the year. Based on this information, the employer calculates and deducts the TDS from the salary. However, the TDS for March is based on the investment proofs submitted by the employee in the last quarter.
However, sometimes, we forget to submit our investment proofs by the given deadline due to a lack of awareness, a change of employment, or administrative errors. Missing the deadline can make you panic. But don’t worry; this article will help you understand “what to do in such a situation.”
Employers are obligated to deduct TDS (Tax Deducted at Source) from the employee’s salary. TDS is a system wherein employers are required to deduct tax at the source of income. Employers deduct TDS from the employee’s salary and deposit it with the government.
If you fail to submit your investment proofs by the deadline, your employer might deduct a higher TDS from your salary. This means you will have a lower salary remaining with yourself.
While the TDS deductions during the year are made on the basis of the investment declarations made at the beginning of the year, the TDS for March depends on the investment proofs you submitted.
The expenses made after March 31st are not eligible for any type of deduction in the current financial year. Therefore, it is important for employees to plan their expenses and investments well in advance and submit their investment proofs by the given deadline to maximize their take-home pay.
Employers start asking their employees to submit proof of income in the last quarter, i.e., from January to March. Generally, the last date for submitting investment proofs is 31st March. However, the exact deadline for submitting the investment proofs varies from employer to employer. Therefore, you must check the last date with your employer to ensure you don’t miss the deadline.
Sometimes, we tend to miss the investment proof submission deadline. Missing this important deadline might make you panic. Even if you have missed the deadline, you still have the option to claim the overpaid tax directly while filing the ITR and providing the necessary documentary proof. So don’t worry, even if you have missed the deadline for proof submission.
However, it is important to note that while the majority of deductions can be claimed, there are certain deductions that cannot be claimed upon missing the proof submission deadline like LTA (Leave Travel Allowance).
As a salaried employee, you can submit various proofs along with your investment declaration to claim deductions. These proofs include:
Are you looking to enhance your tax-saving investments? Apart from the popular tax-saving investments like PF and HRA, there are some additional options you can invest in to reduce your taxable income.
Here are some popular tax-saving investment avenues:
While it is the best idea to submit your investment proofs within the deadline specified by your employer, it is noteworthy that even if you miss the deadline, you can still claim most of the deductions and exemptions (except a few) at the time of ITR filing.
If you still have any tax-related queries or want to know about other tax-saving investment options, don’t hesitate to reach out to our tax experts, who can help make your tax journey smooth. Get Tax Advisory Services Now!
Failing to submit your investment proof by the deadline can result in consequences, including your employer deducting Tax Deducted at Source (TDS) from your salary. TDS is the amount withheld by your employer and paid to the government as income tax on your behalf.
If an employee doesn't furnish the required investment proofs within the given timeframe, the employer must deduct TDS at a higher rate, as required. The responsibility to deduct TDS isn't dependent on receiving investment proofs at a later date.
If you accidentally forget to provide Form 12BB to your employer, they won't be able to grant you the benefit of deductions and other tax exemptions as required. However, you can claim certain deductions and exemptions when filing your ITR.
If you can't claim the LTA within the year, you can carry it forward to the next year. However, it's important to note that the LTA exemption isn't included in the Income Tax Return filing. Your employer will certify your LTA claim and include it in Form 16.
Your employer provides you with HRA. To calculate it, subtract 10% of your salary from the actual rent paid. For individuals residing in metro cities, the HRA is 50% of the basic salary. For those living in non-metro cities, it is 40% of the basic salary.
