AS THE financial year is coming to an end, it's a race against time for those who wait till the last minute to do their tax planning.
Fortunately, there are ways to claim tax deductions where you are entitled to even if you have missed the deadline set by your employer for submission of relevant proof of investments or expenses.
If you are a salaried individual, you are required to submit relevant documents/proof with respect to various exemptions and deductions that you wish to claim. If you stay in a rented accommodation, you can submit rent receipts or a copy of the lease deed to claim exemption in house rent allowance.
In respect of medical and travel expenses, you can submit relevant bills up to the prescribed limit to the employer so that the allowances given to you under these heads are not considered taxable in your hands.
Medical expenses up to Rs 15,000 per annum can be claimed for exemption while in case of travel allowances, expenses for travel to any place within India is exempt twice in a block of four calendar years. The current block is from 2010 to 2013.
In case you are repaying interest on a home loan for a self-occupied property, then you are eligible to claim deduction up to Rs 1,50,000 per annum and the amount can be set off against your salary income as prescribed under the Income Tax Act.
In respect of investment for which one can claim deductions as specified under the In come Tax Act, one should ensure that the same is done before the end of the financial year, that is March 31.
Under Section 80C, an individual can claim deduction up to a maximum of Rs 1,00,000 from taxable income for investments made in specified tax-saving instruments. These include investment in public provident fund (which is limited up to Rs 70,000), national savings certificate, premium for life insurance, bank fixed deposits for tenures of more than five years, repayment of principle on a housing loan, tuition fees and tax-saving mutual fund schemes. In case of salaried individuals, the contribution towards employees provident fund is considered directly by the employer while allowing deduction under Section 80C.
There are a host of other deductions available up to prescribed limits.
These include payment of medical insurance premium up to Rs 15,000 for self as well as family under Section 80D, which can go up to Rs 20,000 if the same is taken for a senior citizen; investment up to Rs 20,000 in long-term infrastructure bonds is available for deduction under Section 80CCF; donations as prescribed under the act (Section 80G 100 per cent or 50 per cent of the total amount depending on the fund to which the contribution is made), interest paid on loan for higher education under Section 80E (entire amount if prescribed conditions are fulfilled), among others.
Now, what if you are entitled to claim deductions under many of these heads but you have missed the deadline to submit your claims? Worry not; you can still claim those exemptions and deductions while filing your tax return.
This means claiming a refund while filing your tax return in case you are unable to adjust the excess tax deducted by your employer against the tax payable on other incomes, if any.
In case you have income from any other sources on which income tax has not been deducted at source, you should ensure that you pay advance tax in time to avoid paying interest at the rate of 1 per cent per month for the delay in depositing such taxes.
However, no interest will be levied for late deposit if the advance tax liability is not more than Rs 10,000.
It is also important to take stock of certificates of taxes deducted on salary (Form 16) and other income (Form 16A).
If the said certificates are not issued by the payers or have been misplaced by the individual, one may not be able to claim necessary credit for the taxes if the tax authorities raise a demand for the same at a later date.
Therefore, it is imperative for individuals to ask for original/duplicate certificates from the persons or entities that deducted such taxes.
These small yet important precautions can go a long way in ensuring that correct amount of taxes are paid with the tax authorities on a timely basis and the tax liability is minimized to the extent possible under various sections of the tax law.
