It’s a common problem at the end of the financial year. The employer
sets a deadline, usually March 15, as the last date for accepting proof of reimbursements. But you are unable to do so because either you have not kept the documents properly or were on leave. Can you claim tax
benefit for that while filing income-tax
There is a good chance that you can do so. It is the responsibility of the employer
to collect evidence on behalf of the employee
for any reimbursement
like telephone bills, medical reimbursement
or house rent allowance (HRA). If the employee
does not submit evidence, it is the obligation of the employer
to deduct tax
and not give the tax
benefit to the employee.
But in such a case employee
can technically claim
the refund if he has actually incurred expenses.
Sanjeev Gokhale, a Mumbai-based chartered accountant, says: “Technically while filing returns you should claim
the refund and it should be granted assuming you have the proof. In nine out of the 10 cases that we file for our clients, we have seen it is granted.”
In most cases, especially for those in the low-income
bracket, there is usually no scrutiny or query from the Income-Tax
Department. But the expense must be genuine and make sure you have documentary proof of those.
Those who could not submit evidence to the employer, maybe because of illness or travel, should arrange the evidence and then claim
benefits, says Naveen Wadhwa, deputy general manager (research and development), Taxman.com.
“Typically in the case of employees with a low salary, say Rs 6-7 lakh, the I-T department does not ask for scrutiny. But if you are a high salaried individual and are claiming huge reimbursements, you could be issued scrutiny notice. But there is no guarantee that you won’t get a notice,” he added.
There is no need to attach proof while filing the ITR, but ensure that the proof is with you. If the I-T Assessing Officer (AO) wants to substantiate whether you have incurred the expense or not, you will be issued a scrutiny assessment notice. Hence, it is advisable to keep the proof for a period of five-six years.
Arvind Rao, of Arvind Rao and Associates, also says that reimbursements are part of the salary
and hence the onus is on the employer
to collect it. But HRA
can be claimed even if proof is not submitted to the employer
because it is an allowance and not a reimbursement.
In case you have missed out on claiming leave travel allowance (LTA), you can claim
it for the next financial year if your organisation’s policy permits you to carry forward the balance.
If you have missed submitting proof of your investments under Section 80, you can claim
exemption while filing tax
returns. These include the Public Provident Fund, Equity-Linked Savings Scheme, repayment of home loans, life and health insurance premiums, National Pension System, school fees for children, repayment of education loan, etc. Again, there is no need to submit proof as these days all tax
returns are annexure-less and electronic, which means you are not supposed to attach any documents, say Preeti Khurana, Chief Editor, Cleartax.com
“Most employees think that if they don’t submit proof to their employer, they cannot claim
exemption. But that is not so. Employer
is just an agent that is collecting tax
on behalf of the government,’’ says Wadhwa.