Income Tax News: Recently, the Income Tax Department ran a full-page advertisement. Taxpayers are cautioned not to make fictitious deductions and exemption claims in this. This advertisement was released at a time when employees of private companies were being asked to provide investment proof.
Businesses Reach Out to Staff
Most businesses have mailed their staff members. It has been stated that the Finance Department must receive the proof of investment for the fiscal year 2023–24 by January 15. The company’s finance department must receive proof of fee payment in order to process a deduction for children’s tuition.
Companies Gauge Employee Tax Saving Intentions
Companies inquire of their employees at the start of each fiscal year about the amount of tax savings they plan to make. Then, at the end of the calendar year, businesses are required to provide evidence of the same. The finance department begins deducting tax from the employee’s pay after obtaining the investment proof. From January to March, he takes three equal installments of tax out of the employee’s pay. Tax Deducted at Source (TDS) is the term for this.
Essential Documentation for Deductions
To be eligible for the majority of deductions and exemptions, you must provide proof. “In order to receive them, employees must present documentation of their deductions and exemptions,” stated Neeraj Aggarwal, a partner at the accounting firm Nangia Andersen India. There are some deductions that don’t require evidence. One illustration of this is standard deduction. Aside from this, employees are not required to provide documentation of their contributions to the National Pension Scheme (NPS) or Employee Provident Fund. This is because the employer deducts them straight from the employee’s pay.
Aggarwal’s Perspective on Necessities
According to Aggarwal, there is a need for documentation in cases like HRAs, LTAs, housing loan interest, children’s tuition, life insurance policies, and mutual fund tax savings plans. According to him, the benefit of the deduction in the TDS computation will not be available if proof is not provided. The employee’s tax liability will rise as a result. Nevertheless, you will still be eligible for the deduction even if you are unable to provide proof of the amount despite your investment. However, you won’t be able to access this until after you file your income tax return. The refund procedure will then begin. It might take some time to complete this.
Aggarwal’s Insights on Employer-Centric Claims
According to Aggarwal, things are a little different when it comes to Leave Travel Allowance, or LTA. Since the employer is the only source of this facility, if you do not provide the document to the employer and claim it directly in your ITR, you may be questioned by the Income Tax Department. Employers require proof of TDS deduction, rent agreement, rent receipt, and landlord PAN from employees in order to claim HRA. According to him, distinct employers might request distinct paperwork in order to make the same deduction.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER