sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
News Headlines »
 All you need to know about gift tax this wedding season
 3rd instalment of advance tax due on 15 December
 Tax on your gold and real estate investments
 Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2018
 Have you filed your income tax? Remember these deadline nears; know from TDS, TCS to challan, forms
 Notification No. 96/2018 -Central Board Of Indirect Taxes And Customs
 Here’s how you can check your ITR refund status online
 Your tax form will be filled by the taxman Income tax return (ITR) filing
  Section 24 and Section 56 of the Banking Regulation Act, 1949 - Maintenance of Statutory Liquidity Ratio (SLR)
  Companies (cost records and audit) Amendment Rules, 2018
 Income tax, TDS rules explained in 10 points EPF withdrawal

How to avoid excess deduction of TDS from salary income
January, 09th 2018

What could be an appropriate proof for your investments and savings in order to prevent excess deduction of taxes? Find out.

The Indian income tax laws cast an obligation on an employer to withhold taxes at the time of payment of salaries. Employers, therefore, withhold taxes on salary paid after allowing a deduction to the extent of prescribed investment/savings.

As a practice, at the beginning of a Financial Year, employees are asked to furnish their ‘Income-tax declaration’ consisting of details of the investments and expenses they propose to make during such FY. Based on such provisional declaration, the employer deducts tax at source on a periodic basis and a true up is done, before the end of such FY, either by deducting further taxes or deducting less taxes for the remaining period as per the actual proofs of investments/savings furnished by the employee. Therefore, it should not be surprising if you find yourself in an annual drill of gathering and furnishing tax-saving proofs to your employer.

Keeping in perspective the provisions of section 192(2D) of the Income-Tax Act, 1961 (Act) read with Rule 26C of the Income Tax Rules, 1961 (Rules) and the industry practices, this article attempts to guide you as what could be an appropriate proof for a given investment or savings in order to prevent excess deduction of taxes.

House Rent Allowance: To claim such allowance, an employee may furnish particulars such as name, address and PAN of the landlord in case the aggregate rent paid during an FY exceeds Rs 1 lakh. In case PAN of the landlord is not available, declaration in Form number 60 should be obtained.

Interest on loan taken for residential house property: In this case, name, address and PAN of the lender, a certificate from the lender bank/ institution containing details such as date of availing the loan, instalment amount and interest chargeable need to be submitted. Such document would also important where the employee may want to set off loss under the head income from house property against his salary income.

Tuition Fees: Copies of tuition fee receipts duly signed/stamped by the educational institution.

Leave Travel Allowance (LTA): Copies of travel tickets including copies of boarding pass in case of travel by air.

Investments under Section 80C: Investment/savings as prescribed under Section 80C gain significance as one can claim an aggregate deduction of Rs 150,000.

In case of a Public Provident Fund (PPF) account, which is the most popular investments avenues, an employee may furnish copies of relevant extracts of the passbook evidencing the deposits made and in case of an online account, the e-receipts containing your account details and transactions could be furnished.

In case of investments or deposits made in Sukanya Samriddhi Yojana, National Saving Certificate (NSC), Infrastructure Bonds, NABARD Rural Bonds and 5-year tax saving fixed deposit, submission of the deposit receipts, bond certificates or certificates etc., received from the bank may be furnished. In case of an Equity Linked Savings Schemes (ELSS) of mutual funds (MFs) and life insurance, employees may submit the ELSS fund statement and premium paid receipts, respectively

For employees who have taken a life insurance policy and wish to avail deduction on such premium paid, they may furnish the receipt obtained at the time of payment from the insurance companies and the relevant extracts of the bank statement evidencing such payment.

Employees can claim a deduction on instalments made of housing loan taken on furnishing of a certificate from the lender bank or institution specifying the amount paid towards principal repayment.

National Pension System (NPS): A copy of deposit receipt for amount deposited during the year and a copy of relevant extract of the bank statement.

Mediclaim Premium: Employees may furnish an 80D tax certificate obtained by the insurance companies in support of deduction of premium paid along with copies of extract of bank statement/ passbook evidencing such payment. Further, an employee may also furnish receipts/bills for any health routine/preventive check-up undergone during the FY.

Donations: In case of donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, National Defence Fund, Prime Minister’s National Relief Fund, etc., employee could submit the proof of donation by way of a receipt containing the particulars viz., Name and address and PAN of trust or institution, Name of donor, Registration number and its validity.

There are no standard guidelines issued by the department with respect to investment proofs to be produced for all the prescribed investments. However, as per the annual circular issued by the Central Board of Direct Taxes, the onus of confirming the genuineness and completeness of the proofs lies with the employer. Further, the circular also provides that if an employer is not satisfied about the genuineness of the employee’s claim regarding any deposit/ subscription/ payment made by the employee, he should not allow the same, and the employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer.

Given the above, it is strongly advised to act on the principle of abundans cautela non nocet, that is to be abundantly cautious by furnishing all relevant proofs obtained while making such investments at the satisfaction of the employer to prevent any excess deduction of taxes. This will help avoid the time-taking process of getting a refund from the tax authorities after an income tax return is filed.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Publishing Management System PMS News Management System Publishing Management System Development Online News Management System for media company custom Publishing management system development Survey management system Market Res

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions