While most employers give time until mid-March to submit all relevant tax-saving proofs to avoid excess TDS deduction, you as an employee will be better-off if you complete the task as early as possible as then in case of excess or less TDS deduction, deduction will be made accordingly in the remaining months of the financial year 2018-19. And there thus remains scope to finalize tax adjustments and you will not have to bear huge tax burden in the last month.
It is to be noted that employers deduct tax from the salary based on the actual investment or expenses proof, and these can be different from the proposed investment declaration made earlier during the year.
And at times it is seen that after considering the tax-saving proofs, investments and expenses, the employer has already deducted TDS in excess, which cannot be adjusted in following months. In such a case, excess TDS will show up in Form 16 and you can claim it for the refund against it by filing an appropriate income tax return.
Some of the important tax saving investments and expenses proof are as below:
Investments made under Section 80C: For life insurance and ELSS mutual fund investment, you need to submit receipt of premium payment and ELSS fund statement, respectively. In case of PPF maintained at a bank or post office, you need to give the photocopy of the passbook indicating account details as well as all of the transactions. In case the PPF is maintained online, you need to produce the print-out providing the account details plus the e-receipt in lieu of all of the transactions. For other eligible investments under Section 80C such as 5-year tax saving FD and Sukanya samriddhi account, you need to furnish either the deposit receipt or bank issued certificate.
New Pension Scheme (NPS): If you have subscribed to NPS investment via employee or corporate model, there isn't a need to submit actual investment proof. Nonetheless, if it is on your own i.e. outside of salary, then you need to furnish copy of your PRAN and NPS transaction statement for your Tier I NPS account.
Home loan interest benefit under Section 80EE to time first-time home buyers: First time home buyers whose loan has been sanctioned between 01.04.2016 to 31.03.2017 have been extended benefit that can be claimed on home loan interest as part of Section 80EE. This is besides the Rs. 2 lakh limit under section 24 of the Income tax act. The deduction is allowed up to a maximum of Rs. 50,000 in a year from FY 2016-17 and until the repayment of loan is made. To make the claim, hard copies of all the relevant documents is to be submitted with the employer.
Tuition fees: For claiming the benefit of this expense, you need to provide the school tuition fees receipt that carries seal of the school along with the receiver's signature.
Mediclaim premium: The claim can be made for mediclaim premium payment by providing insurer's statement sent for tax purpose under Section 80D. Herein you need to have made payment against health insurance either through the digital mode or via cheques from the bank account.
Housing loan repayment (principal): The certificate mentioning the principal amount repaid during the FY 2018-19 has to be collected from your financing institution and submitted with the employer. For the last 2-3 months, you can ask the institution to provide provisional amount as still the EMIs for these months will be pending.