Using Form 12BB, an employee has to declare the investments that they have made during the year. Documentary evidence of these investments and expenses has to be provided at the end of the financial year as well.
Investment declaration has to be made for the following tax-saving investments and expenses:
1. House rent allowance
Rent to be paid to landlord along with name, address and PAN/Aadhaar number of the landlord
2. Leave travel concessions or assistance
Leave travel concession or leave travel allowance as per salary package
3. Home loan interest
Interest payable to lender along with name, address and PAN/Aadhaar number of the lender
4. Deductions under Section 80C, 80CCC, 80CCD
- 80C: Premium to be paid for life insurance and/or investments to be made in ELSS funds, PPF, NPS and/or school tuition fees for children, etc
- 80CCC: Premium to be paid for annuity plan
- 80CCD: Additional contributions made to NPS
Know more about deduction under sections 80C, 80CCC, 80CCD. Deductions under other sections like 80E, 80G, 80TTA, etc.
- 80D: Premium to be paid for medical insurance
- 80E: Interest to be paid on education loan
- 80G: Donations to be made to specified organisations
- 80TTA: Interest income earned from savings bank account
How you can save tax without investing money?
Yes, It is possible for you to save tax by deducting certain expenses which may have already been incurred by you.
By restructuring your salary and by adding certain allowances which are tax-free. So, if you have incurred such expenses then make sure you get a deduction of tax for them.
Leave Travel Allowance (LTA)
The LTA exemption applies only to the domestic travel expenses, such as airfare, train or bus fare, incurred by the employee.
House Rent Allowance(HRA)
The deduction available is the least of the following amounts:
- Actual HRA received;
- 50% of [basic salary + DA] for those living in metro cities (40% for non-metros); or
- Actual rent paid less 10% of basic salary + DA
Phone & Internet Bill Reimbursement
Expenses incurred due to the telephone and mobile usage at home are reimbursed and it can be claimed without any tax.
Uniform Allowance
The total expenditure incurred by an employee for maintaining his/her official uniform is exempt from taxation.
Newspaper/Journal Allowance
The employees can claim reimbursement on the expenses incurred on periodicals, books, journals, newspapers, etc. under the IT Act. This is a tax-free reimbursement which is the lower amount between the total bill amount and the amount provided along with the salary.
Meal Coupons
The food coupons provided to the employees by the employers are taxable as a prerequisite. Up to an amount of Rs. 50/meal, these coupons are tax-free
Children Education/Hostel Allowance
The allowance given by the employer to the employee for their child’s education is tax-exempt. A maximum of Rs. 100/month can be claimed by an employee as an exemption.
The Author is an Income tax, Accounting and GST Practitioner.
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