- Published on February 4, 2016
Tax submission is the buzzing word we all get to hear as we are at the end of FY 2015-16.Its the time when people are engrossed in documentation work of their tax filing and hence we write to you today to help you out as to what paperwork needs to be kept ready at your end from the submission prospectives.
To give you a small guide, here are some tips you can follow you while prepare for your paperwork.
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- Section 80C - With an enhanced limit of Rs 1.5 lakh, employees will have to make sure they file documents for the additional Rs 50,000. For many, this limit gets exhausted by their employee provident fund that is deducted by the company. But, if it hasn't happened, ensure you have put money in instruments allowed under Section 80C. And, present the necessary policy papers or mutual fund investment document to the department.
- HRA - If in a rented flat, it is important to provide a properly registered tenancy agreement. This would have your and the owner's permanent account number (PAN), registered with the municipality. Till a couple of years ago, taxpayers did not have to provide their house owner's PAN unless the rent was at least Rs 1.8 lakh a year or Rs 15,000 a month. The income tax (I-T) department has since lowered the limit to declare the owner's PAN to Rs 1 lakh a year or Rs 8,333 a month.
- However, employees who get an HRA up to Rs 3,000 a month are not required to give receipts for proof of the rent paid. This might not benefit a huge number of taxpayers, especially in big cities, unless they are sharing a flat.
- If the owner does not have a PAN, the employee needs to give a declaration stating this, with the owner's details. The documents need to reach the I-T department within February. If not, the HRA exemption given will be reversed and the entire HRA amount clubbed with the salary and taxed according to the relevant tax slab.
- Leave travel allowance - A lot of employees take the leave travel allowance (LTA) during the year. Now is the time to give the details; some organizations even seek flight tickets to be sure. If you've taken the LTA advance, it is time to give the documents. Else, there will be a serious hit on the salary. For example, if your LTA is Rs 50,000 annually, not presenting the document could hit you by Rs 10,000-Rs 15,000 depending on the I-T bracket.
- Rs 50,000 in National Pension System? A lot of investors would have been enthused by the finance minister's decision to allow another Rs 50,000 tax benefit for investing in the National Pension System from this year. If you had declared it, move quickly. Else, the benefits that have accrued to you during the year will be reversed increasing your tax outgo.
- Medical, conveyance, other -A lot of employees feel the yearly medical allowance of Rs 15,000 is tax-free and be paid to them even if they do not produce any bills. But, if you do not produce adequate bills, this amount will be taxed by the personnel department. Similarly, petrol, diesel and other bills need to be given to ensure you are not taxed on these amounts.
- Hope this helps you in keeping your paperwork ready and organized. For more information on tax, and other related queries,stay tuned to our further posts.