NEW DELHI : Employers seek tax-related declaration from employees twice every year — one at the beginning of the financial year (April-May) and the other one in December-January. The first investment declaration form requires no proof as it is just a declaration of your plans but the second one needs proofs to ensure that the investments declared and the expenses incurred are true. Employers will adjust TDS on your salary accordingly.
The most common investment proof include those related to insurance (ULIPs, life insurance, health insurance), ELSS mutual funds, PPF deposits, home loan, education loan, tuition fees, leave travel allowance (LTA) and house rent allowance (HRA). Here is a list of few such documents which you might need.
The collective maximum cap for claiming exemption on these investments is limited to ₹1.5 lakh.
1) Life insurance policy premium payment receipt
2) Unit Linked Insurance Plan (ULIP) premium paid for self and dependents
3) Mutual fund ELSS investment proofs
4) Public Provident Fund (PPF) investment
5) NSC (National Saving Certificate) investment
6) Repayment of home loan principal amount
7) Payment of tuition fee for upto 2 children
8) Tax-saving fixed deposits (FD) of five years
9) Contribution to pension funds (NPS)
10) Sukanya Samriddhi Scheme contribution
Medical Insurance Premium: You can claim a deduction of upto ₹25,000 for annual premium paid towards any health insurance policy for self, spouse and children under Section 80D. For senior citizens, the limit goes upto ₹50,000.
Loan repayment for higher education (only interest): Education loan taken for higher studies also attracts income tax exemption. The interest part (and not principle) of the loan paid during the financial year can be claimed as an exemption.
Preventive health check-ups: You can claim upto ₹5,000 for yourself and another ₹5,000 for your parents.
Self-contribution to National Pension Scheme (NPS): Besides that under Section 80 (C), an additional amount of ₹50,000 can be claimed under subsection 80CCD (1B).
Home loan: The interest paid on home loan can be claimed for income tax deduction of upto ₹2 lakh in a financial year.
HRA exemption: If you are staying in a rented flat, then an exemption can be claimed on the rent paid, depending on your HRA allowance and basic salary.
LTA exemption: Leave travel allowance (LTA), also known as leave travel concession (LTC), can be availed only twice in a block of four years. You will need to submit travel bills.
If you miss out on submitting any relevant documents to your office’s HR or accounts department, you risk a higher TDS deduction now but you can claim a tax refund later on while filing income tax return (ITR).