Here are a few common questions that arise in your mind if any amount is deducted by your employer in the name of TAX… Many of you people are aware of this but take it at a glance.
1️⃣Why Employer deducted a certain amount from the salary as TAX?
📝Govt. made the employer responsible to deduct Income tax for employees whose yearly salary income exceeds the maximum amount not chargeable to tax i.e., Income Tax payable > Rs. 12,500.
2️⃣Does the employee get any proof?
📄Yes, the employer will give a certificate of deduction (Form 16)
3️⃣Can employees claim deductions (including exemptions and rebates)?
Yes, here are a few common deductions that occur
📣
Standard deduction – Rs. 50,000
HRA – Lower of 40% (if non-metro) or 50% (if metro) of Basic+DA, Actual HRA received, Rent paid – 10% of Basic+DA.
LTA – Availed
🏡Home loan – Full Interest component (Max Rs. 3,50,000 if SOP) and Principal comp. max Rs. 1,50,000 under 80C.
LIC Premium paid max capping Rs. 1,50,000 under 80C
Health Insurance Premium – Max Rs. 25,000 (self+parents) and preventive health expenditure Rs. 5,000 and Rs. 50,000 (Parents being senior a citizen and no Health insurance paid but incurred medical expenditure)
Any donations
4️⃣Does the employee need to submit proof for claiming this?
📚Under the TDS provision if the employee makes certain investments that qualify for deduction or rebate and furnishes the required proof which reduces the tax.
Don’t worry if higher TDS is deducted due to lack of proof,
Here comes the best part, once TDS got deducted everyone needs to file an Income tax return, and NO need to submit any proof to claim the deduction while filing Income Tax Return (ITR).
Hence those proofs are required only when scrutiny notice comes, Chances differs Low - High.
⚠️Simply DYOR (Do at Your Own Risk).
⚠️Disclaimer: No opinion given, just discussed general practice.
Like❤️, Retweet 🔃, Share🤝 and 🔔Follow for more useful personal insights.
• • •
Missing some Tweet in this thread? You can try to
force a refresh