All the employers begin to collect tax planning and investment proof under 80C on december. The advantage of early tax planning and investment is investment proof can be submitted to employer. So income tax would be calculated based on investments by employers itself. If investment on March, it needs to be updated while filing tax. But we have to wait to get back the money return from income tax department. So investing earlier and provide investment proof to employer is smart idea on your investment decision.
Collect your Rental Receipt – Claim HRA Exemption:
You can claim your rent payment in HRA exemption. Collect your rental receipt from landlord and get landlord PAN number in case rent more than 8500 rupees. HRA would be exempted an reduced from Taxable salary.
Collect 80C investment Proof:
Know your PF contribution from your salary. For example, your PF contribution is 50000 rupees yearly. You have to plan for 1.5 lakhs – 50k is 1 Lakhs. You can avail tax exemption for your 1 lakhs by planning your investments.
1). Collect your LIC premium receipt.
2). PPF, Post office Saving, Purchased NSCs proofs.
3). Get your Children Tuition Fee payment receipt.
4). Principal Repayments on Loan for purchase of House Property
5). Bills for preventive health check-ups
6). ELSS mutual funds investment proof.
All the above 6 investment + your PF should reach 1.5 lakhs in 80C section. Otherwise start your investment now on ELSS mutual funds or any other tax saving investment. Start your investment and provide the proof to the employer.
Bill for Your Travel against LTA:
Leave Travel Allowance (LTA) it is an exemption received by the employee from his/her employer for travelling on leave. LTA The bills for your travel against LTA can only be claimed via your employer. You can claim LTA twice in a block of four years. The current block is 2018-2021. There is no way to claim this amount, if you have missed submitting bills to your employer. Collect the bill for LTA to submit proof of travel such as tickets, boarding pass, invoice provided by travel agent to get tax exemption on LTA.
National Pension Scheme Transaction statement :
Income tax section 80CCD(1B) provides tax exemption for 50000 rupees in pension schemes. By availing the national pension scheme, exemption up to Rs 50,000 is eligible in income tax. Taxpayers can save Rs. 15,000 by investing Rs. 50,000 in the NPS. Get the transaction statement for your NPS and submit to your employer for tax exemption.
Collect receipt of donations towards Social Causes:
Prime Minister’s National Relief Fund, Chief Minister’s Relief Fund, Clean Ganga Fund donations are specified in u/s 80G are eligible for deduction and this donation would b 1005 tax exempted. Jawaharlal Nehru Memorial Fund, Indira Gandhi Memorial Trust and The Rajiv Gandhi Foundation donations are 50% tax exempted. So collect your donation receipts to avail tax exemption in section 80U.
Interest Statement and Principal Repayment statement of home loan:
Section 80EE allows an additional deduction of Rs 50,000 can be claimed on home loan interest. Visit your home loan institution and collect your home loan interest statement for the financial year. Submit your interest statement your employer to avail tax benefit in 80EE.
December is month of celebration, meantime it is important to submit your investment proof to avail the tax exemption. Calculate your investment vs income tax and do tax planning. Understanding of income tax section is first step towards tax planning. Happy Investing:)