It’s time of the year when everyone including your employer is worried about your taxes. Most people would have received mail from their Accounts department about “submission of proofs for investments done to claim income tax exemption”. In case you have not, it might be on its way.

This post helps you understand why It is the time for Submit the Income Tax deduction Proof to Employer – With Automatic Tax Preparation Excel Based All in One TDS on Salary with Form 16 for F.Y.2015-16

Salaried class needs to submit these proofs to their employers, how it should be done, what documents to be submitted and if there is a deadline?

Why Employers Ask for Tax Saving Investment Proofs?

Employers are responsible to deduct income tax (TDS – Tax deduction at source) from salary paid to its employees and deposit the same to income tax department. But income tax is complicated and the final tax depends on the tax saving investments a person makes or if the person lives on rent or if he has a house. So to compute your taxes correctly your employer asks for a declaration at the start of financial year (in April). The TDS is deducted based on this declaration.

As we approach the end of financial year, employer wants to make sure you did what you declared as it impacts the tax calculation. So it asks you to submit proofs for income tax saving investment that you made, rent receipts along with any other documents. Once the proof is submitted the employer computes tax based on the actual investments made and TDS is adjusted accordingly.

AlsoDownload Master of Form 16 Part B for F.Y.2015-16: [This Excel Utility Can prepare at a time 50 employees Form 16 Part B for FY 2015-16.]

When does Employer ask for Proofs?

There are no guidelines about when any employer should ask for investment proofs. Some companies start asking for the same in December but most of them would ask for it before end of January. This is asked so early on as the enhanced tax deduction can be done from 2-3 months’ salary. Also this awakes the lazy ones and they start their tax planning.

What if you do not Submit the Proofs?

In case you do not submit the proofs, employer would not be able to give you tax benefit on your tax saving investments. This would lead to higher deduction of taxes. You can claim refund of these taxes only during filing of tax returns.

Documents to be Submitted

Indian income tax laws are complicated and have multiple exemptions and investment options. Below is the list of documents that needs to be submitted to your employer to get relevant tax deductions.

Download All in One TDS on Salary for Private (Non-Govt) Employees for the Financial Year 2015-16 and Ass Year 2016-17 [ This Excel Based Software can prepare at a time Income Tax Compute Sheet + Automatic H.R.A. Exemption Calculation + Individual Salary Sheet + Individual Salary Structure for Central Govt Salary Pattern + Automatic Form 16 Part A&B + Automatic Form 16 Part B + Form 12 BA for F.Y.2015-16]

House Rent Allowance (HRA) u/s 10(13A):- Click here to download the Automatic HRA Exemption Calculator U/s 10(13A)

Following documents need to be submitted to claim tax benefit on HRA:

§                    Rent receipt for starting and the end month and of intermediate month in case there has been change in rent or rented accommodation. So you need to submit rent receipt for April and Dec/Jan if there is no rent change.

§                    The rent receipt must have One rupee revenue stamp on it (ideally a revenue stamp is required for receipts if the rent is paid by cash and is over Rs.5,000 but most employers still ask for it).

§                    No rent receipt is required if the monthly rent paid is below Rs.3,000

§                    Some employers may also ask for copy of rent agreement.

§                    If the annual rent paid exceeds Rs 1 lakh you also need to give PAN number of the landlord. In case your landlord does not have PAN card, a declaration needs to be submitted stating so.

Also Read: What can you do if your landlord does not give his PAN number?

Home Loan Interest u/s 24

§                    Copy of Provisional Interest certification from Bank/Financial Institution stating the amount of principle and interest separately.

§                    The certificate should also have the loan sanction date

§                    Copy of Possession Certificate

§                    Copy of Sale Deed (In case possession letter in not available)

§                    Copy of Lease deed, in case of let out property

§                    In case of Joint Home Loan, self-declaration of the ownership proportion needs to be furnished

§                    Form 12C

Medical Insurance Premium u/s 80D

§                    Copy of Insurance Premium receipt paid

§                    Copy of receipt for Preventive Health Checkup for self, spouse, dependent children or parents

Interest on Repayment of Education Loan u/s 80E

§                    Copy of Provisional Interest certification from Bank/Financial Institution showing the interest and principle separately.

Rajiv Gandhi Equity Saving Scheme (RGESS) u/s 80CCG

§                    Demat Account Statement

§                    Self declaration stating RGESS enabled investments

Handicapped dependent u/s 80DD

§                    Amount paid or deposited under any scheme framed in this behalf by the LIC or UTI or any other insurer and approved by the Board for the maintenance of the handicapped dependent

§                    Physical disability certificate from a physician, a surgeon, or a psychiatrist, as the case may be, working in a Govt. hospital. The certificate should contain the employee’s name and percentage of Disability clearly.

§                    Form 10-IA.

Medical Treatment Expenses u/s 80DDB

§                    Medical Bills / expenditure incurred by way of medical treatment for a specified disease along with a certificate from a hospital in the prescribed form.

§                    Form 10-I

National Pension Scheme u/s 80CCD(1B)

§                    Photo copy of deposit receipt or account statement

Section 80C Deductions:

.No.	Investment Type	Documents as Investment Proof
1	Life Insurance Premium	Copy of Premium Receipt. Late payment fees will not be included as premium paid For the premium falling due after submission deadline, attach previous year’s receipt with declaration (Download: Declaration for Insurance Premium Payment)
2	Public Provident Fund (PPF)	Copy of passbook/statement along with the cover page showing investor’s name OR Copy of the deposit challan duly acknowledged by the Bank
3	Senior Citizens’ Savings Scheme	Copy of passbook/statement along with the cover page showing investor’s name OR Copy of the deposit challan duly acknowledged by the Bank
4	NSC	Copy of the Certificates purchased during the financial year For accrued Interest on NSC – Copy of Certificates to be enclosed with date of purchase and the amount
5	ELSS (Tax Saving Mutual Fund)	Copy of Account Statement
6	Children’s Tuition Fees	Copy of receipts for Tuition Fees and Exam Fees (excluding Donations & Development fees, Bus / Transportation charges, Text Books, Private Tuitions or Tutorial Fees) paid to any University/College/School or Other Educational Institution in India during the current year for a maximum of 2 children.
7	Sukanya Samriddhi Yojana	Copy of passbook/statement along with the cover page showing investor’s name OR Copy of the deposit challan duly acknowledged by the Bank
8	Pension Plan from Insurance Companies	Copy of Premium receipt For premium falling due after Jan ’16. Please attach previous year’s receipt with declaration (Download: Declaration for Insurance Premium Payment)
9	Post Office Tax Saving Term Deposit	Copy of deposit receipt
10	Tax Saving Bank Fixed Deposits	Copy of Deposit Receipt OR Account Statement

Previous Employment Details

In case you were employed with another employer in the financial year you need to give following documents:

§                    Form 12B with copy of Form 16 for F.Y 2015-16/ Latest / Full and Final Tax computation statement submitted by you).

§                    Copy of Form 16 for F.Y. 2015-16 / Latest / Full and Final Tax computation statement certifying Earnings and Deductions from your previous employer is mandatory.

On January 17, 2016 by www.taxexcel.net

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Download All in One TDS on Salary for Govt and Non Govt Employees for F.Y.2015-16 [This Excel Utility can prepare at a time Tax Calculation Sheet + Salary Structure + Automatic HRA Exemption Calculation + Form 16 Part A&B and Part B for A.Y.2016-17 ]

1. No Hike in basic exemption Tax limit

The first disappointment comes in the form of no increase in the basic exemption limit. This means the tax slab will remain same for the financial year 2015-16 i.e. assessment year 2106-17 but the surcharge rate of 10% is increased to 12% for the tax payers having income above Rs.1 crore. This increment in the surcharge rate is made to compensate the income from the abolished wealth tax.

2. Section 80C ceiling limit remains Rs.1.50 lakhs per annum

With the inclusion of Sukanya Samriddhi Account Max limit Rs.1.5 Lakh and equity oriented pension funds Max Rs.1.5 Lakh, there was an inevitable need of expanding the threshold limit of section 80C but that did not happen. Section 80C remains intact in budget 2015.

3. Rise in the Health Insurance Premium paid u/s 80D

To spread the health care awareness among individual tax payers, section 80D has been amended by increasing the deduction limit for the premium paid for health insurance to Rs.25,000 for non-senior individuals (earlier Rs.15,000) and Rs.30,000 for senior citizens (earlier Rs.20,000). For super senior citizens (80 years or more) who are not eligible for health insurance get some relief in terms of deduction towards their medical expenses up to Rs.30,000 per year.

4. Additional Tax-Savings under Section 80DD, Section 80DDB and Section 80U

In view of the steep rise in the cost of the medical care, Government has increased deduction limit under section 80U and section 80DD by Rs.25,000 i.e. medical expense of disabled individual and dependent on Individual, from existing Rs.50,000 to Rs.75,000 and in case of severe disability the addition amounts to Rs.50,000 i.e. from existing Rs.1,00,000 to Rs.1,50,000.

Further, Government has also given additional tax sop of Rs.20,000 (from Rs.60,000 to Rs.80,000) on the medical treatment of some specific diseases such as cancer, AIDS etc. for very senior citizens (aged 80 years or more) under section 80DDB.

5. Transport Allowance Doubled

The transport allowance cost has witnessed some sharp increase and to cope up with that Government has doubled the transport allowance from existing Rs.800 per month to Rs.1,600 per month which totaled to Rs.19,200 per year.

6. Home Loan Interest Deductions remains Intact

The limit of home loan interest deduction u/s 24 was hiked in the interim budget last year to Rs.2 lakhs. But with the rising cost of property, there was a need of increasing this deduction limit to Rs.3 lakhs which was not met. So the ceiling limit of home loan interest for the self-occupied property remains intact at Rs.2 lakhs per year under section 24(b).

7. National Pension Scheme u/s 80CCD increased by Rs.50,000

Investments towards National Pension Scheme has got some additional tax sops of Rs.50,000 over and above the Section 80C ceiling limit of Rs.1.50 lakhs.

Deduction limit of investment towards pension plans, annuity plans and new pension scheme is hiked to Rs.1.50 lakhs from earlier threshold limit of Rs.1 lakhs. In the previous budget, the limit of section 80C was hiked but the deduction limit for pension plans capped to Rs.1 lakh only; now, budget 2015 has removed that anomaly.

Summary of all Deductions

8. Service tax rate increased to 14%

A major hit to the common men comes in the guise of service tax. Budget 2015-16 has hiked the service tax rate from existing 12.36 to 14%. This means now every service such as eating food outside, paying your mobile or gymnasium bills etc. would attract extra tax.

On August 10, 2015 by www.taxexcel.net

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