A well-read person once asserted that something that started well is mostly half done, and there is no going back, especially when planning investments for tax exemptions. Moreover, at the end of each financial year, Proof of Investment becomes the talk of the town. Let us find out more about it here.
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What is Proof of investment?
Employees are liable for tax payments on their income by the end of the year. However, the law defines tax exemption on a few investments. Therefore, employees make an Income Tax declaration at the beginning of a financial year and submit the relevant Proof at the end of the year.
Government cannot verify the investment proofs of each employee. Hence, the business organizations are responsible for verifying the proofs, calculating the relevant tax, and submitting the final tax to the government.
Hence, most employers ask their employees to submit the relevant Proof in December so that the extra taxable amount is in the next quarter. Ultimately, the extra taxable amount does not burden the employees.
Things To Take Care of During Investment Proof Submission.
Tax saving becomes quite easier when we are careful of a few things. While the investment proof submission season has arrived, let us consider all the below pointers:
Be Thoughtful of Your Declaration:
Smart is the one who considers the unforeseen before planning. Hence, always have room for unplanned disasters in your plan. Moreover, never forget that you are liable to pay a huge amount if you fail to invest as planned. Even forging the proofs is severely punishable.
Share Saving Bank & FD Interest
Share the proofs of capital gains on mutual funds, bank and FD interests, and rental income. Hence, your employer has a clear picture of the taxable income. It might help you avoid all future penalties for not paying the tax in advance.
Claim Your Tax Proofs Later.
While filing the tax returns, you can also claim for exemptions much later than the usual time if you have invested in any tax-saving products. People mostly face issues when they make investments on financial products at the end of the financial year. In cases like such, you can ask for exemption much later than the usual time.
Investment Prof Submission for Feb-March
Declare your investments In Feb-March and be aware while filing taxes. It is always great to maintain complete transparency with the employers to be on the safer side. The declaration is just like a promise to employers regarding your investments in tax-saving products for the coming financial year.
The Ideal Time for Investment proof Submission
Investment Proof Submission is one of the vital tasks at the end of each fiscal year. Ideally, employees must submit all the Proof of investments by the start of December. This eradicates the extra workload of employers and makes the tax calculation process easier. However, a digital TDS calculator is always the best approach to calculating TDS accurately.
The Bottom Line
There are ample examples of tax filing blunders incurring unbearable penalties. Hence, be aware and thoughtful of your approaches while filing taxes. Proof of Investment is the verifying document validating your investment in tax-saving financial products.
Tax filing and proof of investment submission is one of the common headaches of people working full time job. However, you must know that a overall knowledge about the compliance can make the whole task easier for you.
