For the majority of the companies, the last date for the employees to submit their investment proofs so that no excess taxes are cut is 10th March. Those employees who miss the deadline of submitting proofs will find that their tax deduction at source (TDS) is more.
What Happens When You Don’t Submit Documents?
TDS is enclosed under Section 192 of Income Tax Act. Therefore, the employer is obligated to withhold taxes during the payment of salaries. Based on the investment declaration submitted by an employee, usually before March 10, the accounts departments compute taxes on the employees’ salary. However, firstly the employee must furnish documentary evidence of the investment declarations made earlier in the year. If the employee is not able to furnish the actual proof, the income for March month will bear the entire impact, and hence, it will be considerably lesser than the usual amount.
How to Avoid It?
Even if your TDS gets deducted, you can still get a refund by disclosing your investments while filing your ITR. The deductions in respect to HRA (House Rent Allowance), or under Section 80c (Insurance Premiums, Tuition fee of the child, housing loan repayment, investments in instruments like ELSS), can be claimed directly while filing ITR.
What Will be Lost?
Not all deductions can, however, be claimed while filing ITR. Tax exemptions in respect to LTA and medical allowance (Now Standard Deduction) cannot be claimed while filing ITR. These allowances must be claimed only via your employer. However, you can request your employer not to deduct taxes and permit you to claim the deduction next year. If in case you do not make any such requisition to your employer, the latter can deduct taxes accordingly, for which you will not be able to claim any return from the income tax department.