Do not submit false tax-saving proof: Your employer is only responsible for TDS deduction based on your income-tax investment proof submission. The employer cannot be held accountable if any wrong information provided by the employee.
Sarbajeet K SenMoneycontrol
All you need to do is to submit proof of investments already made and the tax-saving investments you intend to make during the remaining part of the financial year to minimise your TDS. “Final tax declaration from employees helps employers adjust TDS deductions over the remaining 3 months of the financial year. If tax saving investments have not been made yet, this is a good time to decide on them,” says Archit Gupta, Founder & CEO ClearTax.com.
Gupta says it is better to submit your investment declaration in time instead of having to look for refund of tax deducted by employer. “Final investments can be made up to March 31 and can be claimed directly in the return as well. However, there’s convenience in doing this exercise timely and having TDS adjusted through the employer. Or else the employee will have to claim excess TDS deducted via the tax department as refund in tax return filing.
Refunds are given after processing of tax return,” he said.
Sudhir Kaushik, co-founder and CFO, Taxspanner.com says employees should ideally make the investment submission before due date. “In case the proof is not submitted before the due date the employer is bound to tax TDS,” he told Moneycontrol.com.
Kaushik listed out the following 5 mistakes to be avoided while filing the investments submissions:
Do not submit false tax-saving proof: Your employer is only responsible for TDS deduction based on your income-tax investment proof submission. The employer cannot be held accountable if any wrong information is provided by the employee.
Do not lose investment proof: In fact you should preserve your proof for 8 years. In case your case comes up for scrutiny and verification of tax paid by the income tax authority after few years and you have changed jobs also it would be difficult to get copies from your employer as well. It may be noted that the I-T authorities can ask these proof in the next 8 years for verification even if you have submitted to employer.
Do not invest for tax saving alone, match with goals: the tax saving should be one of the prime objectives not the only one. You should opt for the tax-saving instrument as per your financial needs. If an investment is not useful for your financial goals than better to avoid and pay tax.
Submit proof well before due date fixed by employer: The last minute rush in submission would be costly. Your proof might get rejected and you may lose the opportunity to invest. You may miss the deadline and additional tax get deducted resulting in liquidity crunch.
Future investments intent declared should be executed: The investment which is expected in next 2-3 months should be declared and executed to avoid interest penalty.
(As published on moneycontrol,October 22, 2018)