Time for Investment Proof Submission
January is the in India when employers ask for tax documents to calculate the tax and make the deduction accordingly in the next 2 months. This is a standard practice followed by employers and based on the documentation provided the real tax will be calculated. The financial year in India is from April to March so at the beginning of the financial year, all the employers ask their employees to file a declaration of the investment that they are going to do in the year. Whatever amount is declared by the employee is considered at the beginning after the financial year and at that time documents are not required.
In the month of January, most of the organizations ask for documentation and based on this, their tax is computed. This way these organizations are providing the flexibility to the employees to get the direction done in 2 months to split the tax amount into 2 parts. I think this is a good approach because if there is more deduction in one month's salary then it is going to affect the monthly expenses of employees.
I did my part for this year and submitted all the tax documents on time. 24th January was the last day for the submission and I did it by end of the day so now the only thing pending is to get the audit confirmation done by the tax team. Once the submission is done by all the employees in my organization then the tax team reviews the documents and in case of any discrepancy they ask for the correct document. Fab and march month will be the time for the tax reduction and if someone is not able to provide it document during the financial year then the only option left is to claim the refund of tax paid through the tax filing.
The tax exemption limit in India is 250k INR which has not been changed for the last 6-7 years and this year it's expected in the union budget. The union budget for the year 2023 is scheduled to be presented on the 1st of Feb 2023. It is highly expected this time to see some increase in the tax exemption limit by the government along with the increase for section 80c. This section is mainly for investment that includes insurance and mutual funds etc. This is currently 150k INR which has also not been changed for a long. It's been a long time since the changes were made so it is high time that the government needs to make some changes so that people find it more convenient for them as the limit is really on the lower side.
As responsible citizens, it is expected that everyone needs to submit and file taxes on time but for the employees, this is done by the employer so there is no way that one can ignore it because salaries are processed after-tax deductions only. The government has been doing good work in this area to improve the tax mechanism/system and also to bring more people under the tax slap so that this can contribute to more revenue for the government. Now even any individual can file their taxes with ease online and the process is more simplified.
The current financial year will be ending on 31st March and tax filing for this year will be starting from June month with the end date as 31st July 2023. This date has been extended most of the time but there is no surety so it is always suggested to file the taxes on time without waiting for an extension on the due date.
Now since I have done my part by submitting the documents so will be waiting for form 16 from my organization which will be shared after a month once the financial year ends. Generally, this is shared in May month and post that time the tax filing starts.
Thank you
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