The Financial Year end is round the corner. Your employer may soon
ask you to submit the investment proofs for the financial year
If you are an employee of a company, at
the beginning of every financial year (or) while
joining the company you have to submit ‘IT Declaration’
to your employer. This is a provisional statement that has details about your
proposed investments and expenses that are IT deductible.
At the financial year end, you need to provide supporting Investment
Proofs for these investments that you have specified in IT declaration. (Generally
most of the employers ask for investment proofs during Jan to Feb)
Based on your proposed investments and expenses, your employer
deducts TDS (Tax Deduction at Source, if
from your monthly salary and deposits it to the government account. To
calculate TDS, your employer considers the declared investments and expenses
that are either Tax Exempted (or) eligible for tax deductions under IT
You need to submit both IT investment declaration and proofs (documents)
to your employer. If you do not submit the required proofs at the year end,
your employer will then be forced to deduct complete tax without considering
your provisional investments.
The IT Department has also issued a circular and made it very clear
to all the employers to verify the genuineness of each claim made by the
employee. So the verification of investment proofs will be more stringent by
Income Tax Deductions & Deductible Allowances –
the document proofs that are generally accepted to claim IT exemptions and
80C : To claim
tax deductions under 80c, you can submit below investment documents as proofs;
- If you have a life insurance policy, you can submit Life Insurance
Premium paid receipts. These receipts can be in the name of
self/spouse/children. (Premiums paid on endowment / money-back / ULIPs / pension / Term insurance policies can be submitted)
- Passbook copy of PPF (Public Provident Fund) or Copy of the stamped deposit receipt, paid during current financial year.
- Home loan statement
from your banker or provider which reflects principal portion of your EMIs.
- Mutual Fund statement
(Investments in ELSS funds or Retirement funds only, lump sum or SIPs).
- Kid’s tuition fee receipts. Kindly note that any payments made towards donation, uniform fee, van fee, maintenance fees etc.will not be considered.
- Copy of NSC certificate in the name of self.
- Copy of Tax saving Bank deposit receipt (5 year deposit).
- Copy of Post Office Term deposit receipt with more than 5 year term.
- Copy of Sukanya Samriddhi Account passbook.
- Stamp duty, registration fees and brokerage expenses paid towards transfer of the property can be claimed as deduction.
(However, if you transfer the property before the end of 5 years from the year in which you took possession of the property, the deduction
claimed will be added back to your income and you’ll have to pay tax on
- Section 80 D:
Copy of premium receipt paid during the Financial Year can be submitted.
You can also submit receipt(s) that are paid towards health-checkups. (Read
: Section 80D – Health Insurance premium & Tax benefits)
- Loan statement or interest certificate from your banker or home loan provider.
- You also have to submit completion certificate or occupancy certificate.
whether the house is self-occupied or let out by one.
- HRA (House Rent Allowance): Monthly rent receipts
& rental agreement have to be submitted. The receipts should contain
your landlord’s name, address and signature. If the annual rent paid is
more than Rs 1 Lakh, landlord’s PAN should be quoted. In case, if you are
paying the rent by cash, you have to affix revenue stamp on the receipts.
If you are a
salaried employee receiving a house rent allowance (HRA) and are
staying in a rented house, you can claim a tax exemption in lieu of the
same under Section 10 (13A) of the IT Act. Those who are self employed are also
eligible for tax deductions under Section 80 G of the IT Act.
(Section 80G) : Receipts of donations are considered as proofs. Typically the receipt
issued by the charitable organization you donate do mentions the
eligibility under Section 80G. Kindly note that you may not be able
to claim this deduction if your donation is made in cash and exceeds Rs
- Education Loan (Section 80E) : Copy of loan certificate
reflecting the interest payments.
- Medical Allowance: Do
not get confused between your medical reimbursement allowance and med
claim expenses. Medical allowance is provided by your employer. It is part
of your employment agreement (salary structure) between your
employer and yourself. To claim this allowance, you need to submit
original medical bills with Doctor’s prescription copies. The
medical reimbursement allowance is exempted under Section 10 of the IT
- Medical Treatment on handicapped dependent (Section 80DD) :
Copies of medical bills and duly completed Form 10-IA have to be
- Medical treatment expenses for the specified disease (Section 80DDB) : Medical Bills / expenditure incurred by way of medical treatment for a
specified disease along with a certificate from a hospital in the
prescribed form. (To claim Tax deductions under Section 80DDB, it is
mandatory for an individual to obtain ‘Doctor Certificate’ or
‘Prescription’ from a specialist working in a Govt hospital only. This
condition causes undue hardship to the persons intending to claim tax
deduction. Now, CBDT (Central Board of Direct Taxes) has issued a notification
relaxing this condition. Specialist Doctors working in Private hospitals
also can issue a ‘certificate / prescription’ now). Download Form
Contributions (Section 80CCD) : Copy of the stamped
deposit receipt, paid during current financial year and copy of the
Passbook with clear mention as NPS (National Pension System) Account.
(Leave Travel Allowance) : The bills (travel
tickets) for your travel against LTA can only be claimed via your
employer. LTA is allowed to be claimed twice in a block of four years. The
current block is 2014 to 2018. You are allowed to carry forward your
unclaimed LTA to the next year, so you can request your employer to not
deduct tax on it and allow you to claim it next year.
- The last date to submit Investment proofs will be intimated to you by your employer.
- To safeguard the interest of the organization, your employer has the right to define the verification guidelines and more controls in addition
to the IT rules.
- Kindly note that there is no need to submit copies or originals of your
investment proofs to the IT department.
- It is advisable to keep copies of all your original documents for your future
you join a new company during the middle of the Financial Year, do inform
them about your previous income details and also submit fresh IT declaration.
- If your SIP or life insurance premium due date is say in the month of March and the last date to submit IT proofs is say in January, you can provide a declaration that you are going to make these investments in March.You can also submit previous year’s documents that are related to these investments.
case, if your declared investment amount is more than your
actual investments, you have to pay additional taxes while filing your
IT Return (or) your company may re-calculate your tax liability and can
deduct taxes accordingly for the months of January to March.
case, if your declared amount is less than your actual investments,
your company might have deducted higher TDS. So, you can claim this as ‘refund‘
while filing your taxes.
you are falling short of your projected declared amount, you can plan your
investments in the next 3 months or so.
if you miss the deadline for submitting the investment proofs, you can
still claim all the tax deductions (except few allowances like LTA or
Medical allowance) while filing your IT Return.
is prudent to avoid last minute tax planning. Do not invest in unwanted
life insurance polices or in any other financial products just to save
taxes. It is better you plan your taxes based on your financial goals at
the beginning of the Financial Year itself.
miss the IT proof submission deadline set by your employer. Do submit your
investment proofs to your employer on time and make sure you have a pleasant
financial year end
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