Did Not Submit Tax Saving Proof On Time. Worry Not

By | March 28, 2018

In case you have been busy at work and forgot to submit your investment proofs, here is what you can do to ensure you are not liable for any unwanted tax deductions.

Did Not Submit Tax Saving Proof On Time. Worry Not

Submitting investment proofs to your employer as per the stipulated date is vital for your financial planning. Most employers offer a window between January and the first week of March for submission of all such investment proof to help them structure your salary and tax deducted at source or TDS. Non-submission of your investment proof can mean a higher TDS from your March salary. This would reduce your take-home pay in the final months of the year, which may not be convenient to you and send your money plans into a tizzy.

In case you have been busy at work and forgot to submit your investment proofs, here is what you can do to ensure you are not liable for any unwanted tax deductions.

TDS & Investment Proof Submission

Your employer is obliged to deduct taxes while salary to his employees. The amount of tax deducted is based on the proposed investment declaration each employee submits to the employer towards the beginning of the financial year. The accounts department then devises the proposed investments and computes liable taxes to be deducted from the salary.

Closer to the financial yearend, when you as an employee submit your actual proof of investments, your employer computes the final taxes based on this final evidence. For employees who do not submit the investment proofs, the tax deduction can be much higher for the month of March.

Missed Disclosing Partial Investments

TDS is deducted on the actual investments made and not on just the proposed investments that you may have submitted at the beginning of the financial year. So if you fail to disclose any additional investments made, you can still disclose the missed investments at the time of filing your income tax return (ITR). Any extra deducted TDS will then be refunded to you once the ITR is processed by the income tax department.

What If You Have Not Submitted Any Proof?

Any investments that you may have made towards House Rent Allowance (HRA), all investments for various offerings available under Section 80C like life insurance, home loan principal and interest repayment, tuition fee of children, ELSS investments, PPF and more can be disclosed directly to the income tax department at the time of filing your tax return between April 1 to July 31.

These investments will, however, not appear on your Form 16 but you can still go ahead and seek deductions. Unlike the investment related proofs that you are required to submit to the employer, you are not required to submit the same at the time of filing your ITR. This by no means suggests that you should not have detailed proofs for all your investments. The I-T Department can seek proofs of investments made at any time for a period of six years from the date of filing of your ITR for the relevant assessment year. So ensure you keep a record of all your investments like insurance premium receipts, rent receipts for HRA, PAN card of your landlord if the rent is greater than Rs. 1 lakh for the AY along with all other receipts of your investments.

Downside Of Not Submitting Your Investment Proofs On Time

Some deductions like leave travel allowance (LTA) and any travel or medical reimbursements can only be claimed for if the relevant details have been submitted to your employer. Without submission, you will lose any possible benefits or tax deductions offered. Although medical reimbursement and transport allowance have been replaced by a single standard deduction from FY 2018-19 filings, LTA deductions need to be submitted to your employer.

If you have missed the gun for submission of your investment proofs, there is still hope. However, by submitting your investment proofs in time can mean easier tax payments and ITR filling and no waiting to seek tax refund from the IT department.

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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

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