Updated March 15th, 2024 at 09:17 IST

Yet to submit your investment proofs? Experts warn of higher TDS impact

Submit investment proofs to your employer before March 31st to minimise TDS deductions and maximise tax savings, say experts.

Reported by: Business Desk
The deadline for income tax proof submission for the financial year 2023-2024 is March 31 | Image:Pixabay
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Submit timely & save big: Are you yet to submit your investment proofs to your employer? With the March 31st deadline fast approaching, experts stress ensuring timely submission to avoid higher Tax Deducted at Source (TDS) deductions and maximise tax-saving opportunities.

The process of furnishing investment proofs is an annual requirement, enabling employees to benefit from tax-saving opportunities and reduce their TDS burden.

Investment declaration process

Typically, employees declare their investments at the beginning of the financial year, which exempts them from TDS deductions for the initial three quarters. However, the final quarter, spanning from January to March, necessitates the submission of documented proof for these investments.

Notably, missing the investment submission deadline can have financial repercussions, leading to increased TDS deductions. Expenses incurred after March 31st are not considered eligible for tax deductions in the ongoing fiscal year.

What if you forget the deadline

In cases where the deadline is missed, employees still have recourse. They can make eligible investments before March 31st and incorporate these deductions directly into their income tax returns, which must be filed before July 31st. However, this alternative approach may invite scrutiny from the income tax department.

The responsibility for deducting taxes and depositing them with the government rests primarily on employers. Even if an employee commits to submitting proofs at a later date, employers are obligated to deduct TDS based on earlier declarations. Therefore, it's essential for employees to furnish investment proofs by the end of the fiscal year to validate their deductions.

"Failure to submit proofs on time doesn't render the deductions invalid. Employees can still claim these deductions in their income tax returns. However, it's imperative to adhere to deadlines to avoid unnecessary complications and ensure smooth tax compliance,"said Arpit Suri, CA and personal finance expert .

"Timely submission of investment proofs is paramount for individuals seeking to optimise their tax-saving strategies and mitigate the risk of higher TDS deductions. With the March 31st deadline looming, employees should take proactive measures to fulfil this requirement and secure their financial well-being," Suri added.

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Published February 18th, 2024 at 17:52 IST