You must have declared your investments to your employer at the start of the financial year. The employer then takes all of these investments into consideration, allows deductions like 80C, 80D etc. and then deducts TDS on your salary.
Now, when the last quarter of the financial year begins, you’ll be asked to prove you really made those investments during the year.
What do you need to show?
You are required to submit proofs related to the investment made. Below are a few examples:
- If you invested in things like PPF or ELSS, give your employer proof like a PPF passbook or a statement for ELSS.
- Receipts of health insurance premiums to claim 80D deduction.
- Donations receipts, if you’ve made any, to claim deduction u/s 80G
- Rent receipts for your rented accommodation to claim HRA (House Rent Allowance) and travel receipts to claim LTA (Leave Travel Allowance).
What if you fail to submit the proofs?
If you are unable to submit the proofs, your employer will adjust your income without the deductions and might deduct more TDS in the last months. But don’t worry, you can claim a refund of the excess taxes while filing your ITR.
How to claim a refund of the excess TDS?
So, while filing your ITR, you can claim all the eligible deductions which will then reduce your tax liability. The difference amount will then be issued to you as a refund.
Can I switch regimes when filing ITR, if I have opted for a different regime with my employer?
Yes, you can opt for the preferred regime at the time of filing the ITR and it can be different from the regime opted with the employer. You can analyse which regime is more beneficial to you after considering all the investments that you have throughout the FY.
Questions? Ask away!