Why and How to submit proof of tax saving investments and expenses to employer

In our earlier articles we have discussed the form to be used for annual return of income and the due date of filing with the government.

In this article, we will discuss the deadline for submitting proof of tax saving investments and expenses with employer to claim tax benefits. Government didn’t fix any deadline for submitting proof of tax saving investments and expenses to employer.

However, as per law, the employer has to deduct TDS amount from your salary every month and deposit it with the government on or before the due date.

To make sure that you have invested or spend the money that you are claiming as a tax deduction, government has asked employer to collect proof of investments or expenses.

Your employer will fix the deadline for each year. Generally the deadline for submitting tax proof of investments and expenses is December or January of the previous year.

On or before the deadline, you are required to submit certified true copies of documents as a proof of your investments and expenses along with a declaration. It can be submitted in paper form or online.

Many companies are using online facility for collecting declaration and details after which hard copies of proof for tax savings investment and expenses are collected along with a printed signed copy of declaration.

In that declaration, you can also state your other incomes and loss from house property, if any.

Based on your declaration and proof of tax saving investments and expenses, employer will calculate your final TDS amount to be deducted for the year.

After deducting TDS on salary for the earlier periods, if any remaining taxes are to be deducted from salary, then it has to be deducted before March month of the previous year and deposit it with the government.

Proof of tax saving investments and expenses generally accepted by employer

An individual can invest or pay for expenses based on his/her eligibility. Below is a list showing proof of tax saving investments and documents that can be accepted by your employer to claim tax benefits;

  • Life insurance premium receipts
  • Public provident fund statements
  • Tuition fee receipts
  • Medical insurance receipts
  • Rent receipts and agreement to claim house rent allowance
  • Statements for investing in sukanya samriddhi account.
  • National saving certificate copies
  • 5 years Fixed deposit copies
  • Contribution to National pension scheme or NPS receipt

You are not required to submit original copies to your employer. A certified true copy of these documents will serve the purpose.

What happens if deadline is missed

If you miss the deadline for submitting proof of tax saving investments and expenses, then your employer will deduct higher TDS amount from salary in the remaining months of the year.

Higher tax will be calculated as investments and expenses declared by you at the beginning of the year will not be considered now for non submission of proof. This means your employer has to deduct higher TDS amount than your actual liability.

In this type of situations, you can claim refund for the extra TDS amount deducted by claiming tax benefits of your investments and expenses while filing annual return of income.

You need not submit proof of tax saving investments and expenses while filing return of income.

However, you need to keep all these documents with you as government department may ask for it at the time of scrutiny. To be on safe side, we suggest you to invest or pay money through banking mode as in case of requirements you can always produce your bank statements.

Please remember, you have time till 31st March of the year to invest or spend your money to claim tax benefits.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.