Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

• 9th Mar 2021
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Tax planning in India has become accessible and easier to adopt due to the rising digitisation and access to various sources and references. However, many individuals (especially newly joined salaried employees/professionals) have confusions regarding taxes, tax-saving investments and ways to claim the tax benefit. One such area of confusion is the TDS and the various investment proofs that one would need to lower the TDS cut.

Employers in India are bound to cut TDS every year, and the failure to submit the right documents might cause you to pay more or less than the required amount.

What is Tax Deducted at Source (TDS)?

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).

Investment Proofs You Need Submit to Lower TDS Cut from Your Salary

The kind of investment proof for TDS cut you need to submit will depend on the type of investment you make. Mentioned below is a list of investment types:

• Mutual Funds or ELSS: For investments such as Equity Linked Savings Schemes (ELSS) or Mutual Funds (MF), you can submit the ELSS fund statement or mutual fund statement.
• Insurance Policy: If you have made investments in an Insurance Policy, you can submit a copy of your policy documents and the acknowledgement receipts from your insurance company which has recorded the payments of your life insurance premiums.
• Public Provident Fund (PPF): If you have opted for the Public Provident Fund (PPF) and opened your PPF account with a bank or post office, you can submit the passbook photocopies showing all transactions details regarding the deductions. In case you are maintaining your PPF account online, you can take a printout of the e-receipt and submit it as an investment proof.
• Fixed deposit: If you have invested money in a 5-year tax-saving fixed deposit plan with a bank, you are required to submit a receipt of deposit or certificate from the bank to your employer. The proof of investment will remain the same if you have opted for Sukanya Samriddhi Scheme as well.
• National Pension Scheme (NPS): In case you have made an investment in National Pension Scheme (NPS) via the Employee Model or Corporate Model, there is no need to submit any proof of actual investment as it is recovered and deposited by your company in your PRAN (Permanent Retirement Account Number) account. However, in case you have opted for NPS on your own, i.e. outside your salary, then you need to submit copies of your PRAN card and NPS Transaction Statement for Tier-1 Account.
• Other Tax-saving Expenditure
o Tuition Fees: In case of tuition fees, you can submit the school fee receipt with the school seal and a signature of the receiver. o House Rent Allowance (HRA): If you seek tax benefits on HRA, then the PAN number of your landlord is mandatory. The conditions are not applicable for individuals paying an HRA of ₹1 lakh or less in a year, i.e., ₹8333 per month.

Conclusion

Some employers would not demand every document and investment proofs mentioned above, while some may need their own set of documents. Hence, to get the right TDS salary, it would be best to get a confirmation from your accounts department before making any submission.

- A Consumer Education Initiative series by Kotak Life