Buy a Life Insurance Plan in a few clicks
A plan that offer guaranteed returns and financial protection for your family.
Kotak Guaranteed Fortune Builder
A plan that offers guaranteed income for your future goals.
Thank you
Our representative will get in touch with you at the earliest.
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
Submitting the appropriate investment proofs, you can potentially lower the amount of TDS deducted from your earnings. Read further to avail tax benefits of a lower TDS cut from your salary.
Tax planning in India has become accessible and easier to adopt due to the rising digitization and access to various sources and references. It plays a vital role in handling finances effectively. Understanding the investment proofs required can make a significant difference to tax liabilities.
Whether you are a seasoned expert or just starting your career, understanding TDS can prove to be a game-changer in optimizing your tax obligations. By making smart investment choices and presenting the correct proof, you can not only reduce your TDS cuts but also enjoy financial security and potentially enhance your wealth over time.
So, let us embark on this knowledge-packed journey together, uncovering the investment proofs that can help you minimize your TDS deductions and boost your take-home salary.
Tax Deducted at Source (TDS) is a type of income tax deducted from the amount of money paid during specified payments, such as salaries, rents, professional fees, commission, interest, etc., by the person making the payment.
Normally, the individual receiving income is liable to pay an income tax. But the government, with the help of TDS, ensures that the income tax is deducted in advance from the payments. The receiver of income gets the net amount (after reducing TDS).
TDS deducted on salary is a way for the government to collect taxes directly from individuals’ income. When it comes to salary, employers deduct a certain percentage of tax from your salary each month as per the income tax rules. This deduction is essential for managing financial liabilities. Let us have a look at different ways in which TDS can be significant:
TDS on salary ensures tax compliance by making it mandatory for employers to deduct and deposit the tax on behalf of their employees. It helps in lowering tax evasion and promotes a transparent tax system.
By deducting tax at source, the government receives a regular inflow of tax revenue throughout the year. This aids in managing government finances and meeting various public expenditure requirements.
TDS simplifies the tax payment process for employees. The tax liability is distributed over the year through monthly deductions from the salary rather than having to pay the whole amount at the end of the fiscal year. This reduces the burden of a lump sum tax payment.
Employers are responsible for estimating the correct amount of tax to be deducted based on the applicable tax slabs, exemptions, and deductions. This ensures that the tax deducted is accurate, avoiding any underpayment or overpayment of taxes.
The salary certificate or Form 16 is an essential document for individuals while filing their income tax returns. It helps the employee reconcile the TDS deducted by the employer with the taxes payable for the financial year.
This certificate includes details of the salary earned and the TDS deducted during the financial year. A salary certificate typically contains the following information:
While it may not be absolutely possible to avoid TDS on salary altogether, you can minimize its impact through certain methods:
LTA is an allowance provided by employers to cover your travel expenses during your leave. By submitting proof of your travel expenses, you can claim exemptions on LTA, reducing your taxable income and thereby lowering TDS.
Investment Proof: Submit the travelling bills, such as copy of train, air or bus tickets. You can also submit hotel bills or other bills.
Contributions made to PPF accounts are eligible for deductions under Section 80C. By showing PPF documents, you can reduce your taxable income and subsequently avoid higher TDS deductions.
Investment Proof: You have to submit a copy of your PPF passbook. If you don’t have a passbook, you can upload a printout or screenshot of your PPF statement from the website.
By paying premiums for medical insurance policies, you can claim deductions under Section 80D. This not only provides you with healthcare coverage but also reduces your taxable income and subsequently lowers TDS.
Investment Proof: You can present a copy of your policy agreement along with any receipts the insurance provider issues after you pay your premiums.
Contributions made to NPS accounts are eligible for deductions under Section 80CCD(1B). By investing in NPS, you can reduce your taxable income and consequently save on TDS.
Investment Proof: To receive tax benefits, a copy of the Annual Transaction Statement (Tier I) can be used as investment proof.
If you are a salaried person living in a rented house, you can claim exemptions on your HRA as per the provisions of the Income Tax Act. This helps in reducing your taxable income and minimizing TDS.
Investment Proof: Rent receipts for each month are required. You can provide receipts proving license fee payment if you and your landlord have a leave-and-license agreement.
Investment Proof: You have to present a copy of the passbook of Sukanya Samriddhi Yojana to be exempted from TDS.
Donations made to eligible charitable organizations are eligible for deductions under section 80G of the ITA (Income Tax Act). By contributing towards noble causes, you not only make a positive impact but also reduce your taxable income and minimize TDS.
Investment Proof: You have to submit a receipt from the trust or charity you donated the money to. The receipt should contain information such as your name, address, the amount donated, the trust’s PAN number, etc.
TDS is also applicable to payments made to contractors, freelancers, and other non-salaried individuals. The TDS rates for these payments vary depending on the nature of the payment.
In a world where financial stability and independence are paramount, being proactive in reducing TDS deductions from your salary through the submission of investment proofs is an essential strategy. It allows you to take control of your finances, optimize your tax liability, and work towards achieving your financial goals. So, gather your investment proofs, engage in comprehensive tax planning, and pave the way to a brighter and more prosperous financial future.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
