Investment proofs you need show in January to save TDS

Five mistakes you must avoid while investing to save income tax

In order to calculate the exact amount of income tax that you must pay, note down your exact taxable income. The final payable tax is calculated by applying the tax rates and then deducting the amount that has already been paid through TDS (Tax Deducted at Source) and other forms of advance tax.

In India, the concerned authorities follow a particular slab structure for levying of taxes. These tax rates have been prescribed for different slabs and such tax rates keep increasing with an increase in the income slab. Every financial year, the revised or unchanged slabs are announced and this maintains the integral taxation system. Further, since the budget of 2018 has not announced any changes in income tax slabs this time, it remains the same as that of last year.

There are three categories of individual taxpayers:

  1. Individuals who are yet to cross 60 years of age and this includes non-resident Indians as well.
  2. Senior Citizens who have already crossed the age of 60 years.
  3. Super senior citizens who have crossed the age of 80.

Income Tax Slab and Rates for Financial Year 2018-19 are as mentioned below:

  • People who have an income less than Rs. 2.5 lac annually have to pay no tax
  • 0%-5% tax with income ₹ 2.5 lacs to 5 lacs for different age groups
  • For people who earn an annual income of Rs. 5 to Rs. 10 Lacs, 20% will be charged as tax.
  • Investments up to ₹ 1.5 lacs under Section 80C can save ₹ 45,000 in taxes.

Now, as per the same applicable rules under Section 80C of the Income Tax Act, 961, there are certain permissible deductions for these slabs that are covered under the purview of investment proofs that you can show for claiming TDS deductions.

Investment in Life Insurance: In life insurance segment, there are various types of plans available through many insurance companies and while investing in such plans, the amount that is payable as premium acts as a hedge against deductions, which means that you can show your investment as a proof for seeking due exemption.

Public Provident Fund Account:  In India, PPF acts as a savings-cum-tax-saving scheme. PPF is regulated by National Savings Organization and is deducted by an employer on current source. A copy of the passbook and the receipt of the deposits made act as investment proofs for the due submission for TDS savings.

Equity Linked Saving Schemes: Investment in ELSS or Equity Linked Saving Schemes mean earning tax benefits along with the possibility of optimum returns. Again, the receipt of investment proofs acts as a documentation for the benefit while TDS reimbursement.

Investment in Medical Insurance: In our country, there are different insurance options available for different kinds of healthcare coverage. Taking out a healthcare policy can act as a substantial proof of investment when it comes to seeking exemptions and TDS reimbursement forms an important part of such claims.

HDFC Life presents several saving and investment plans that offer multiple avenues to assist you in saving your funds and making your funds work for you in the long run. For details, click on the mentioned link:


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