There is no reason to panic since you have time till March 31 to make the necessary investments for tax saving.
You may be scrambling to meet the investment declaration deadline set by your employer or may have already missed it for reasons beyond your control.
Most companies have an investment declaration deadline around the beginning of the last quarter of the financial year for their employees to file their intended investments for the fiscal to avail tax benefits.
Investment declaration helps companies to adjust tax deduction for the remaining part of the financial year based on the employee’s likely investment in approved tax-saving investment by the end of the financial year.
However, what if you miss the deadline set by your company? Your TDS will be adjusted accordingly for the remainder of the financial year. However, there is no reason to panic since you have time till March 31 to make the necessary investments for tax saving under Chapter VIA of the Income Tax Act, which includes the most commonly used Section 80C options and claim a refund from the Income Tax department.
“The employee can make relevant tax-saving investments before March 31 for each relevant year and claim refund of income tax (if any) while filing his income tax return,” says Amit Jindal, Partner, Felix Advisory.
Archit Gupta, Founder & CEO ClearTax.com, says you will have time till July 31 to file for the refund for any investment made within March 31 for which tax deduction has not been calculated.
“If you miss your investment declaration deadline, your employer will re-calculate your tax liability and deduct the excess tax due from your salary for the following month. You can see the details of tax deducted in form 26AS, also available on the income tax portal. You can still file your IT Returns with the government before the July 31 deadline. You can declare them in your ITR and claim a refund for extra tax deducted,” he said.
However, this will involve a wait for some months for you to be able to get the excess tax deducted in your bank. “IT refunds are only processed once you file your ITR,” says Gupta.