In order to determine the authenticity & appropriateness of the investment based deductions and reliefs to be claimed by the employee, the employee is required to furnish relevant documents and all necessary information about the investments. Investment proof is the actual proofs employees must submit where they must declare the investments made by them for tax computation as per Income Tax Act,1961. These proofs are only required by the employers as they deduct TDS and serve as the third party validating the claims made by the employees. It is therefore advisable to submit true and exact information about the investments made by the employees.
What are few common mistakes employees makes while submitting proofs or few important things to keep in mind while submitting proofs?
Few important things to keep in mind
What happens if you fail to provide the proofs on time?
If a taxpayer fails to make these declarations till prescribed time, the following consequences may follow: –
- In case proof of investment based deductions are not submitted, the taxpayer may end up paying higher tax.
- Further, non-filing of documents on time will push the employer to subtract the income tax. However, at the time of filing tax returns, the taxpayer may still claim the tax refund in case he made tax saving investments later.
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