Download the All in One TDS on Salary for Non-Govt Employees for Financial Year 2015-16 and Ass Yr 2016-17 [ This Excel Based utility can prepare at a time Tax Compute sheet + Individual Salary Sheet + Individual Salary Structure + Automatic HRA Exemption Calculation + Automatic Form 16 Part A&B and Part B for F.Y.2015-16 only for Non-Govt Employees]
Claim Income Tax Exemptions And Deductions After Passed the Finance Budget 2015 to the Salaried Persons
The deadline to file income tax return is closing. You might have got the form 16 from your employer. You may be in the hurry to complete this annual ritual. This year, you may be e-filing income tax yourself. The process has become easier. Even you don’t need to send ITR-V.
Are you sure about the tax deduction amount? Have you saved tax as much as possible? Is there not any chance to save more tax?
4 out of 10 people have the opportunity to save tax before e-filing income tax return. You may be also one of them. No, I am not talking about the tax saving investment of the new financial year. You can still save tax on the investments of previous financial year. As, there is a probability of under reporting the tax deductions and exemptions.
The employers deduct tax according to your income, exemptions and tax saving investments. For uniform tax deductions throughout the year, the employers ask a tax declaration. You state your insurance premium, ELSS, PPF and other tax saving investments. In the month of January and February Employers again ask the investment proof and rent receipts to calculate the final TDS on the basis of hard facts. This is the time when you may be struggling for the proofs. Many tax saving investments are done in the hurry. You have to meet the deadline given by the employer. The total tax deduction is done on the basis of the given proof.
you might miss the deadline. You might not produce proofs on time. You may not get the receipt of term insurance on time. You may have invested in the PPF account just before the end of the financial year. The tuition fees receipt may come late. Or, you may find a good time to invest in ELSS after the deadline. There may be many reasons of under reporting.
Did you also miss the bus of tax saving? Not really. If you deserve to pay less tax, the proof submission deadline can’t deprive you. What if, your employer has deducted excess tax, you can claim income tax refund. The income tax filing is the method to claim refund of excess tax.
Hence, once again, you should review the tax liability. Write down all of your tax saving investments and expenses. Ponder over the tax exemptions. Were you eligible for more tax exemptions? Here is the checklist to help you.
· Did your landlord increase the rent of the last few months, will this increase was part of the HRA exemption?
· Did you take an insurance plan after the proof submission deadline?
· Did you contribute into the PPF account just before the end of the financial year?
· Did you get the receipt of tuition fees after the proof submission deadline?
· Did you also invest lumpsum amount in the ELSS in addition to thes ystematic investment plan (SIP)?
· Have you gone for the health check up after the deadline?
· Is your home loan approved after the deadline and EMI started before 31st march?
The reasons can be many. You have to just think over it. A review of tax deductions and exemption can save tax. It is to your benefit.
Fortunately, if you find any missed tax deduction or exemption, you can ask for tax refund.
Path To Save More Tax
Think Beyond Form 16
You can cut excess tax while filing income tax return. The income tax return is the mechanism to present the tax liability with all the details. In this form, you have to tell about the income, the applicable exemptions and tax saving deductions. The ITR utility calculates tax according to the data given by you. It relies upon you.
To simplify the things your employer gives form 16. The form 16 has all the details of your income, TDS and tax saving exemptions and deductions.
The form 16 only helps in filing income tax return. It is not the final word of your tax calculation. The income tax return filed by you is final tax information from you.
No Need To Attach Any Proof
Do you want to add any extra tax deduction investment in the income tax return? Are you thinking of sending the proof of extra investment to the income tax department?
Just chill. The income tax department does not accept any proof of investment. Neither, it accepts any proof with income tax return, nor It accepts the proof from your employer. Rather, It is the responsibility of your employer to maintain the record. If required, income tax department can ask the record and proof.
As far as the investment proof after the deadline is concerned, you need not to attach it with the income tax return. Indeed, It is not possible with efiling.
Keep All The Records To Prove The Claimed Tax Exemption And Deductions
The tax department relies on your income tax declaration and accepts your income tax return. But, if it finds any anomaly or tax avoidance, the assessing officer can ask for the proofs. Nowadays, the hi-tech system of income tax department can track all of your earning and investment. Hence, if there is any suspicion, it can ask for proof. Therefore, you should always keep the investment proof for 6 years. The tax department can reopen the case of the last 6 years.
Don’t Misuse System To Avoid Tax
It seems enticing to file a false income tax return. It can give heavy tax refunds.
But, please beware! Tax avoidance has become very tough, therefore you should always give correct information in the ITR form. Be truthful to avoid heavy penalty.
Take Note of the Financial Year
You can claim tax deduction on the investment done after the proof submission deadline. But it does not mean you can also count the investment done after the 31st March. Please take care of the financial year before adding any investment in ITR forms.
You can Also Revise ITR
If for any reason, you misses to report an investment in ITR form, you can report it further. You can file revised income tax return. The extra investment can be incorporated in the revised income tax return.
Claiming Tax Refund Can’t Be A Norm, It Is a Suspicious Behaviour
The income tax return gives you the opportunity to get back the excess taxes. But, It can’t be a regular practice. You should not ask for tax refund every year. Although, technically there is nothing wrong with repeated tax refund claims. But this type of behavior can generate suspicion. You should not attract the tax official.
The Exemptions and Deductions You Can File In Income Tax Return Form
There are some exemption and deductions which are not dependent upon the employer or form 16. You can give the information about the exemption, you deemed correct.
House Rent Allowance exemption on your income tax return
House Rent allowance (HRA) exemption is a major tax saver for salaried. Without the HRA, your tax liability increases substantially. Therefore, you must take the tax benefit of HRA. This exemption is available when the employee is living in a rented accommodation and pays rent to the landlord.
But could you not submit the rent receipt before deadline? Did your employer deduct tax on the HRA as well? You can claim this exemption through the income tax return.
1. To avail this benefit through ITR, you need to calculate the HRA exemption available to you.
2. You should deduct the applicable HRA exemption from the taxable income.
3. If you have already availed some HRA exemption, you should only deduct the remaining exemption.
The HRA exemption will reduce your total tax liability, which in turn will give you a tax refund.
EPF Contribution
The EPF can be also claimed at the time of income tax return filing. Since, the employer deducts this amount it self, there would be a less chance to change in this amount. The PF contribution by you is eligible for tax deduction under section 80C.
Life Insurance premium
The premium paid by you for life insurance for yourself, your spouse or any child can be claimed as a deduction. The deduction can be claimed for the full amount paid (premium including service tax & other charges).
Children’s Tuition Fee Payment
Tuition fees paid by you for the education of your children (maximum 2) are eligible for tax deduction under section 80C. If you could not produce the receipt of fees paid, you can claim this expense with income tax return.
Principal Repayments on Home Loan
The principal payment of a home loan is eligible for tax deduction. You can mention it in the income tax return. The home loan principal payment deduction is covered under section 80C.
Health Check-up
The health check-up is often missed. Under section 80D, you can claim tax deduction on the maximum expense of 5000 in a financial year. The health check-up can be of your, spouse or children.
Exemption Can’t be Claimed In the Income Tax Return
You can’t claim each and every tax exemption through the income tax return. There is some exemption, which needs the validation of your employer.
LTA
Expenses on a trip against the LTA can only be claimed via your employer. Because, it needs the authorization of the employer. The unclaimed LTA can be carried forward to the next year.
Medical Reimbursement
Medical reimbursement requires original receipt. Only your employer can claim tax exemption under this head. You can’t claim it with the income tax return.
You have a flexibility to claim the tax deductions and exemption with the income tax return. But never try to misuse it. The advanced technology of the income tax department is keeping an eye on every taxpayer. Also, you must keep the record of all the claimed exemptions or deductions. So that you can produce it whenever the tax assessing officer asks.
