This article aims to detail various deductions/exemptions that one can claim as per the provisions of The Income-tax Act, 1961 in case such deductions have not been claimed in the Form 16 issued by the employer
In India, if you are working as an employee, your employer computes taxes on an estimated basis on the annual salary and withholds taxes at the time of payment of such salary (i.e. pay taxes as you earn). For this purpose, employees are required to submit a declaration of their investments (in the beginning of the year or at the time of joining employment) for which tax deductions can be claimed and also provide copy of proofs of such investments within the deadline as provided by the company (usually before end of January). Failure to do so, might result in deduction of taxes without claiming the actual benefit of deductions.
If you are faced with such situation and have missed the income tax proof submission deadline given to you by your employer or have made investments after the deadline dates but before the end of the tax year (i.e. 31st March), then you might feel that your tax planning efforts are disappointing as you would have not claimed the deductions and your income would have been subject to higher rates of taxes. While it is advisable to submit the proofs on time, but if you have missed the deadline, you still have a way to claim tax deductions and get refund for the higher taxes deducted from the income tax department.
This article aims to detail various deductions/exemptions that one can still claim as per the provisions of The Income-tax Act, 1961 in case such deductions have not been claimed in the Form 16 issued by the employer.
One of the very famous and common deduction amongst the salaried class employees is deduction available under Section 24b of the Act i.e. interest on loan taken for residential housing property. Another deduction that can be claimed at the time of filing the ITR is tuition fee paid by the taxpayer.
Further, house rent allowance (HRA) or house rental deduction is another popular deduction. In case the said deduction is not claimed in the Form 16; then it can be claimed by the taxpayer at the time of filing its return. However, to claim such allowance the individual need to possess details of landlord including his Personal Account Number (PAN) if aggregate rent paid during a financial year (FY) exceeds Rs 1 lakh. In case PAN of the landlord is not available, declaration in Form 60 should be obtained.
Investment/savings, as prescribed under Section 80C, gains significance as one can claim an aggregate deduction of Rs 1.50 lakh. Investments in Public Provident Fund (PPF) account, Sukanya Samriddhi Yojana, National Saving Certificate (NSC), infrastructure bonds, NABARD rural bonds and 5-year tax saving fixed deposit, etc., can also be claimed.
Similarly, you can claim your preventive health check-up bills under section 80D of the Act. In case you are supporting a differently-abled dependent in your family or undergoing a medical treatment as self, deduction can be claimed under section 80DD, 80DDB and 80U of the Act while filing your income tax return.
In case of donations, it is sometimes seen that donees do not furnish the donation certificates to the donors who in turn do not furnish the same on time to the employer whereby losing such deduction. In case the taxpayer possesses the appropriate document, such individual can claim the deduction in their tax return.
It is pertinent to note that if you are claiming the eligible deductions at the time of filing tax returns, then you just have to furnish details of your investment while filing your income tax return and are not required to submit proofs of your actual investments to the income tax department. However, it is important to remember retain these proofs for six years in case your income tax officer seeks it in future for assessment.
Despite the above respite, it is advisable to submit your proofs to employer on time in order to avoid unnecessary blocking of your funds due to excess tax deduction by your employer. So make sure you submit your proofs on time and be hassle free. Nevertheless, the option to claim deduction for eligible investments are anyhow available at time of filing the return as well.(The writer is Director at Grant Thornton India LLP. CA Girish Varandani contributed to this article.)