Not submitted investment proofs yet? Here's how you can still save tax
Financial year is coming to an end and salaried people are looking for tax saving options. The deadline for submission of investment proof has already passed. In most the organisations, the employees are allowed to show the proof of their proof of their tax saving invest and expense till December or max January end.
But, what if you have missed the deadline to submit the proofs of your investment? Sadly, if you fail to show the proofs, heavy tax will be deducted from you monthly salary.
What if we say, that you still have one more opportunity to rectify your mistake? When you file your tax return, you can still claim tax benefits on eligible investments and few of the expenses.
Speaking with Zeebiz, Chetan Chandak, Head of tax research, H&R Block India, explains how you can still claim it.
There are certain perquisites or expenses reimbursed by your employer which are eligible for tax benefits like uniform allowance, medical reimbursement, car allowance, telephone bills etc. These perquisites can be claimed to reduce taxes but only if you submit the bills on time to your employer.
Since you have already missed the deadline to do so, tax gains on these are lost. However, provisions of I-T Act offer you several other avenues to make up for this loss. Here's how you can still reduce tax burden and claim it back from the tax department.
There are several common expenses in the life of salaried taxpayers which are exempt from tax net as per the laws of Income Tax. For e.g., you can get tax benefits on rent paid if your employer provides you HRA. If you don’t get HRA, you can still get some relief under section 80GG which is a less known tax deduction. Similarly, tuition fees that you paid for your child’s education can also be claimed as deduction. Interest paid on education loan taken for yourself or your wife or your kids is also deductible from tax.
If you have a home loan, then you can claim multiple tax benefits through filing tax return. Stamp duty, registration charges and principal repayment of home loan is deductible under section 80C while interest paid is also free from tax under section 24. Moreover, if you took this loan for your first home, you can get additional tax benefit of up to Rs. 50,000 u/s 80EE.
The donations you make are also an expense for you. Section 80G, 80GGA and 80GGC cover provisions which make your donations eligible for tax deductions. Any donation that you made to various political parties, scientific research and rural development institutions and charitable institutions can save your taxes.
If you have taken a term insurance (not being a traditional or endowment plan) or a health insurance plan for your family, you can claim tax benefits on the premium that you pay for it. If you haven’t invested in any of these insurance plans, then this should be your first investment before you look for other tax saving investment plans to further save your taxes.
Section 80C of I-T Act which offers tax savings of up to Rs 1,50,000 in a year, lists down several tax saving investment plans. First option is EPF. Your employer’s contribution into your EPF account up to 12% of salary is exempt from tax. Your own contribution also qualifies for deduction. You can ask your employer to increase the quantum of your contribution to get more tax deduction while significantly boosting your funds in your PF account. This cannot be done now as this Financial Year has almost ended. However, you can request your employer to increase your contributions to EPF for next year to get tax benefits in the upcoming year.
Other investments are Equity Linked Savings Scheme, Sukanya Samriddhi Account, are also considered one of the best tax saving investment avenue in the umbrella of section 80C for those with a girl child less than 10 years in age. Both interest earned and maturity proceeds are exempt from tax.
Most of these deductions will not be reflected in your Form 16 if you have not submitted the proof of it to your employer in time allowed.
Remember that if you claim huge tax refund after filing tax return, tax department may look inspect your return and ask questions.
So, ensure that you keep all the proofs of expenses and investments safely with you so that you can answer any notice from the department with ease.