Want to avoid higher TDS? Keep these papers handy
Feb 18 2013
In order to correctly compute the taxes, an employer would collect the proof that allows the tax benefits and compute the balance taxes that need to be deducted and deposited. Here is a list of documents that you should keep handy:
Investment proofs: Section 80C of the I-T Act provides tax benefits on certain investments and specified expenditure, including contributions to provident fund scheme, public provident fund, life insurance premium, principal repayment of housing loan, five-year fixed deposit, children’s school fee, to name a few. There is an upper limit of Rs 1,00,000 on the tax deduction that can be claimed. Make sure you collect all the investment proofs and submit them to your employer.
Rent receipts: Employers generally require you to submit copies of rent receipts if house rent allowance is provided. Make sure you have all your rent receipts in one place and a lease deed, if your employer requires it. As per the latest TDS circular, an employee is required to provide the permanent account number (PAN) of the landlord if the rent exceeds Rs 2,00,000 per annum.
Home loan interest certificate: If you have taken a loan to purchase a property you occupy, interest on the loan up to Rs 1,50,000 is allowed as deduction. In case of property that has been let-out, entire interest payment is allowed as a deduction and the resulting loss, if any, can be set-off from the salary income.
Health insurance: Payment of health insurance premium is eligible for deduction under Section 80D of the I-T Act. Preventive health check-up expenses up to Rs 5,000 are also available as a deduction under this section from the current financial year. Hence, if you have incurred such expense for yourself, spouse, children or parents, then you should keep the bills handy so that you can provide it to your employer and taxes can be computed accordingly.
If you have made any donations to specified institutions during the year, you may be eligible for tax exemption. If you are claiming deduction for leave travel concession and haven’t claimed it until now, then you should collect the train tickets and boarding passes. Similarly, if you have medical reimbursements as part of your compensation structure, then you should collect the medical bills and provide these to your employer so that taxes can be computed accordingly.
If you have changed jobs during the year, it is possible that both your employers have provided you with the income tax slab benefit. You can submit your income details for the previous employer to your current employer so that the correct taxes are deducted. These details can be submitted in Form 12B.
Keeping the above points in mind shall ensure a smooth tax year-end for you and minimize the hassles later at the time of filing the tax return.
(The author is a director in KPMG. The views expressed are personal)