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Money Matters

TDS on Salary | Investment Proofs You Need Submit to Lower TDS cut from your Salary

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Tax saving solutions are highly in demand among the taxpayers’ community. You want to ensure you make investments that allow you to save on taxes and provide more disposable income. In this regard, TDS (Tax Deducted at Source) is one such liability you most likely want to minimise. This is possible if you make the tax-saving investments and submit the necessary proofs to your employer or any other authority, who makes TDS salary deductions.

Here are some investment proofs for TDS cut reduction:

  • Investments under Section 80C: The Income Tax Act, 1961 allows you to claim tax exemption on specified investments up to ₹1.5 lakh. However, you need to submit documents of your investments including:

    • Life insurance policy premium

    • Unit Linked Insurance Plan (ULIP) premium

    • Mutual funds ELSS investments

    • Public Provident Fund (PPF) contribution

    • National Savings Certificate (NSC)

    • A tax-saving fixed deposit (FD)

    • National Pension Scheme (NPS) contribution

    • Sukanya Samriddhi Yojana (SSY)

    • Payment receipt for the tuition fee for two children

    • Repayment of the principal amount of home loan

  • Interest paid on an affordable house: In the Budget 2019, the government provided a deduction of interest paid up to ₹1.5 lakhs on an affordable house. This will be in the form of interest paid on a home loan up to ₹3.5 lakhs. However, to qualify for this exemption, ensure the below rules are followed:

    • The loan must be availed between April 2019 and March 2020

    • The official value of the house should not be more than Rs. 45 lakhs

    • You must not be the owner of another house at the time of exclusion.

    • You must not claim any deduction under Section 80EE

  • Purchase of first home: According to Section 80 EE, first-time homebuyers are given a tax exemption (up to ₹50,000/year) for interest paid on home loans availed between April 2016 and March 2017. The exemption is offered until the loan is repaid in full. This allowance is in addition to the ₹2 lakhs limit according to Section 24 of the Income Tax Act. You must submit home loan documents, interest payment receipts, first-time homeowner proof, etc.

  • House Rent Allowance (HRA): The Income Tax Act, 1961 also allows you to claim for an HRA provided your rent is more than ₹8,333/month. However, you need to submit the landlord's PAN card, along with the rental agreement or a declaration by the landlord. Besides, you will need to show proof of the landlord’s ownership via the property deed, electricity bill or house tax receipt.

  • Mediclaim premiums: According to Section 80D, you can avail exemption on Mediclaim premiums paid for self, spouse or dependent children. The maximum deduction is ₹25,000. However, if any covered person is a senior citizen (60 years and above) and has Senior Citizen Health Insurance, can claim ₹50,000 as a deduction for Mediclaim premium paid. In all cases, the premiums should have been paid by cheque or bank transfer and not by cash. You will need to submit all payment receipts and necessary other policy related documents required. 

  • Others: Other smaller tax exemptions include Leave Travel Allowance (LTA), preventive health check-ups and interest repayment (in the concerned financial year) on loan taken for higher studies. You can claim an LTA twice across four years by submitting travel bills. For preventive health check-ups, the maximum exemption is ₹5,000 for self and ₹5,000 for parents. 

You can make these easy, smart and tax-saving investments and submit the required proofs to minimise the TDS cut from your hard-earned money. Be wise, save more!

You can also visit YES BANK's website to know more about their Savings Account and Fixed Deposit Accounts.


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