Income Tax: In the old regime of income tax, deductions are available on many types of investments and certain types of expenses. Deductions available under Section 80C and Section 80D of the Income Tax Act are examples of this. Claiming deductions reduces the tax of taxpayers
Income Tax: Companies are asking their employees to provide proof of tax-saving investments. Most companies have set a deadline of January 15 for this. Employees have to provide proof of tax-savings during the financial year 2024-25. Why are companies asking for tax-savings proof? What will happen if the proof is not given? What will happen if this proof is given after the deadline? Let us know the answers to these questions.
What does tax-savings mean?
In the old regime of Income Tax , the benefit of deduction is available on many types of investments and certain types of expenses. Deductions available under Section 80C and Section 80D of the Income Tax Act are examples of this. Claiming deduction reduces the tax of taxpayers. More than a dozen investment options are available under Section 80C. These include PPF, ELSS, life insurance policy etc. Apart from this, claiming deduction on tuition fees of two children is also allowed under this section. Claiming deduction on health policy premium is allowed under Section 80D.
Why are companies asking for tax-savings proof?
Every month the company deducts tax (TDS) from the salary of the employee. This deduction in tax is done according to the tax-saving plan given by the employee at the beginning of the financial year. The finance department of the companies usually asks for tax-saving proof from the employees by 15 January. On the basis of this proof, it calculates the tax of the entire financial year of the employee. If even after tax-savings, additional tax is payable on the income of the employees, then it deducts tax from the salary of January, February and March. If an employee has not invested according to the tax-saving plan, then he will have to pay more tax. Then the finance department deducts tax from the salary of January, February and March. The reason for this is that a new financial year starts after 31 March.
What happens if you do not submit tax-savings proof?
If you have done tax-savings for FY25, then you should give its proof to the finance department before the deadline of January 15. You can claim HRA. For this you will have to provide proof of rent payment. You can provide proof of investment in life insurance policy, ELSS, PPF etc. under 80C. You can provide proof of premium payment of health policy under section 80D. If you do not provide this proof, then the finance department of the company will deduct more tax from the salary of January, February and March. Due to this, less salary money will come in your bank account.
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