Partial amount disclosed
At times a taxpayer may forget to show the entire amount of the qualifying amount for deductions to the employer. It can be for tuition fees or for investment in equity-linked savings schemes (ELSS), especially when it is done via the systematic investment route. The balance or the additional amount may still be disclosed in the income tax return (ITR) to claim tax benefit on it. All is not lost
Now, even if TDS gets deducted, you can still get a refund by disclosing the investments, expenses and other deductions while filing your ITR anytime between April 1, 2018 and July 31, 2018, the last date for filling tax returns. "While deductions in respect of house rent allowance (HRA), or other deductions under Section 80C such as life insurance premium paid, children's tuition fees, principal component of housing loan repayment, investments in tax saving
fixed deposits, ELSS etc., can be claimed directly at the time of filing of return of income if you have failed to submit proof for these before the end of the financial year to your employer," informs Archit Gupta, Founder & CEO ClearTax.
Proofs to be submitted to the income tax department
The employer needs proof of investment before the benefit of such investments may be given to the employee. Similarly, the income tax department could require proofs, although, one is not mandated to send them such proofs. "It is important to note, that although the investment proofs are not to be submitted with the income tax authorities it is recommended to keep them safely for a period of at least six years," cautions Gupta.
Other than investments, you may have claimed benefit on HRA at the time of filing your ITR. "While no document needs to accompany your return of income, ensure that you have these with you for the purpose of record and future reference. Rent receipts issued by your landlord for rent you have paid during the year and if the rent has exceeded Rs 1 lakh, ensure you have obtained the landlord's PAN. In case he does not have a PAN, have a declaration to this effect made by him in writing," said Gupta.
What gets lost
Not all deductions can, however, be claimed at the time of filing the income tax return. Gupta says, "Income tax exemptions in respect of leave travel allowance (LTA) and medical reimbursements cannot be claimed while filing the return. These have to necessarily be claimed via your employer."
The LTA tax break can be claimed for travel of self and family members for journeys undertaken within India. It is available for 2 journeys in a block of 4 calendar years. The block applicable for the current period is calendar year 2018 to 2022. Any unclaimed amount can be carried forward to the next block. "Since LTA can be claimed via your employer, you can always request your employer to not deduct tax and permit you to claim it in the next year. If you have made no such requisition to your employer, the latter would deduct taxes accordingly, refund of which you may not be able to claim from the income tax department," says Gupta.
Even though the rules set by the Income-tax Department are crystal clear, the accounts department of several organisations may follow their own set of guidelines. Therefore, before availing of any such exemption, it's better to get clarity well in advance.
Further, medical reimbursements up to Rs 15,000 every financial year is exempt from tax provided one furnishes the bills or consultancy receipts to the employer. If one misses to furnish them to the employer, TDS will be cut by employer and you can't claim them while filing your tax returns. Interestingly, from the next financial year, the Finance Bill 2018 has removed the medical reimbursement and transport allowance (different from LTA) and instead provided a standard deduction on the salary income.
One can, therefore, not only take the benefit for investments not reported to employer but can also make any tax saving investments till March 31, 2018 ( provided the payment gets credited ) and claim the benefit while filing tax returns.
