A profound person once said, “Well begun is half done!”. The timeless saying has the utmost relevance in today’s world, especially while planning investments for tax exemptions. Moreover, when every financial year ends, Investment Proof Submission or Proof of investments (POI) becomes the talk of the town. Let us know more about it here.
What is Proof of Investment?
At the end of the year, employees must pay off their income tax. However, a few investments apply to tax exemptions. Hence, employees make an IT declaration at the beginning of every financial year and submit the relevant Proof of the investment at the end of the fiscal year.
The organization is responsible for verifying those proofs, calculating the relevant tax, and submitting the final tax to the government. Mostly, employers ask their employees to submit the relevant proofs towards the beginning of December.
Hence, they consider the sums and distribute the extra taxable amount in the next quarter. Hence, the taxable amount does not become a burden on the employee.
The Ideal Time for Investment Proof Submission
Investment Proof submission becomes important at the end of the fiscal year. Ideally, employees should submit all their investment proofs by the start of December. This reduces the employers’ workload and makes the process of tax calculation way easier. However, a seamless Automate TDS Solution can make the process easier and more accurate.
Ideas to Submit Investment Proofs
Tax saving is easier when you take care of a few things before going ahead with the investment proofs of investments. While the tax saving season arrives, consider all the below pointers:
Be Thoughtful to Make a Proper Investment
Ensure proper thoughtfulness before making your declaration. You must remember that you can be liable to pay a much higher amount if you fail to make the investments and pay the tax. Moreover, forging fake investment proof is also punishable.
Share Saving Bank & FD Interest
Share your savings bank interest, capital gains on mutual funds, FD/RD interest and rental income. Hence, your employer gets a clear picture of your taxable income. It might help you avoid penalties for not paying advance tax before the due date.
Claim Your Tax Proofs Later
When filing tax returns, you can claim tax relaxations much later than usual if you have invested in tax-saving products.
Submitting Proofs is Not Mandatory
Submitting proofs is not mandatory while filing taxes. Which means the declaration is sufficient as information. However, that does not imply that you can be dishonest about your investments. Always keep the receipt of your investments in tax-exempting products so that you prove it anytime later.
Submit Proposed Investment Proofs for Feb-March
You must declare your investments in February and march beforehand to suffice this condition. It is like a promise to the employer regarding your investment in tax-saving financial products.
The Bottom Line
Tax filing blunders have led to some huge penalties for people. Hence, be aware and careful while filing taxes and maintain complete transparency with your employer to tackle the TDS filing challenges well.
Proof of investment for income tax is a verifying statement for the businesses to validate their employees’ investment in tax-saving products.
Have you ever made any Proof of Investment blunders? Let us know in the comment section below.