Every salaried individual needs to pay taxes if their income exceeds the exemption limit in a financial year. However, you can also claim deductions and reduce your overall tax burden, as per different sections of the Income Tax Act, 1961.
To claim deductions, you can invest in tax-saving instruments such as Public Provident Fund and Equity Linked Savings Scheme. It is important to submit the proof of these investments to your employer so that you don't suffer a tax deducted at source higher than what should have been applicable as per your annual pay package.
Usually, employees have to submit proof of investment during the period between December and January. The exact deadline can vary depending on the organisation or the company. If you fail to submit the proposed tax-saving investment declaration for the financial year, then your employer will not consider your investments while calculating TDS. It ultimately leads to higher TDS deductions every month.
So, what can you do if you miss the deadline for submitting an investment declaration to your employer? Thankfully, even if you miss submitting an investment declaration to your employer, you can claim a refund for the extra TDS deductions at the time of filing your income tax return. You will need to provide proof of your investments to claim the deductions.
It's important to note that claiming the tax benefits in your ITR filing depends on the income tax regime you choose. You can claim several deductions under various sections of the I-T Act, 1961, under the old tax regime. The new tax regime offers only limited deductions with lower tax rates.
Proofs That Can Be Submitted To Claim Deductions
Receipts of Life Insurance Premiums: You can submit the receipts of life insurance premiums you have paid for coverage under life insurance policies. You can claim these benefits under the overall Rs 1.5 lakh limit under Section 80C of the Income Tax Act 1961.
Receipts of Health Insurance Premiums: This pertains to premiums paid for health insurance coverage for yourself, spouse, children and parents. Under Section 80D of the I-T Act, you can claim a deduction of up to Rs 25,000 in a financial year. For senior citizens, this limit is capped at Rs 50,000.
Tax-saving Investments: Under this, you can submit proof of investment in schemes such as ELSS, Unit Linked Insurance Plans, National Pension Scheme contributions, PPF and other government-backed schemes.
House Rent Allowance: Those getting HRA and living in a rented property can claim deductions by submitting receipts of rent payment. The taxpayers need to submit at least one receipt for each quarter.
Home Loan Interest: You can claim deductions under Section 24 (b) of the Income Tax Act, 1961, by providing proof of your home loan interest payments.
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