IT returns: Why you should preserve investment proof

Taxes

oi-Sneha

By Sneha B K

Published: Wednesday, April 24, 2013, 14:49 [IST]

Tax payers are required to submit their investment and required expenses details with proper proof to their employer so that the employer should know about the relevant details which will further pass on to CBDT (Central Board of Direct Taxes).

If the proof is not submitted during the reasonable time then the employee could not be able to avail deductions or exemptions. If a company is not satisfied about the correctness of the proof, it will not accept it. In this case, the employee will not able to claim the genuine deduction and exemption, because it is adhered by mandate given by CBDT to all companies to satisfy themselves about the correctness of investments/payments proofs provided by employees.

A company may not accept the document from an employee due to lack of adequate proof. In that case, the employee can claim such benefits from the Income-Tax Department directly while filing the return again with proper proof; however at that time it would be not be an easy task to get the things done.

After filing return the assessee has to file the rectification petition to income tax authorities. Then within 6 months from the end of the month in which application has been made, the order for rectification will pass. The rectification will be made either by an Income- tax authority or by the commissioner of Income-tax (appeals). Therefore, it is very important to provide proper proof during the reasonable time to take advantages of deduction and exemptions, which is the right of every tax payer.

maintaining proper proof while filing IT return

Important Proofs While Filing IT Return Following are some important list of the "proof" used for taking advantages of deductions under sec 80 C of IT act :-

Life Insurance Premium :-

Proof - Premium payment receipt having name of the insured, sum assured and payment date.

Provident Fund (PF) :-

Proof - Receipts of contribution in PF with details of total contribution in previous year.

National Saving Certificate (NSC) :-

Proof - The certificate itself is the proof. Make sure that investor's details are correct.

Fixed Deposit (FD) :-

Proof - 5 year FD certificate that mentions the deposits is eligible for tax sever scheme.

Repayment of Housing Loan :-

Proof - The receipt of Principal amount paid for housing loan.

Pension Fund :-

Proof - The receipt of sum contributed under the pension plan of Life Insurance Corporation or the pension scheme notified by Central Govt.

Conclusion

Apart from above mentioned proofs, the taxpayers should also keep proper records of expenses claimed under income tax and bills of various assets and products purchased. As per various stipulations, it is important for a taxpayer to keep tax records and supporting documents for at least 8 years. So, it is important to keep the documents safe and secure to easily handle the IT scrutiny anytime in the career.

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