Dated: 07th August April, 2015

PROPOSED / ACTUAL SAVINGS SUBMISSION GUIDELIENS FOR FY 2014-15

( PERIOD 1ST APRIL 2014 TO 31ST MARCH 2015 )
A.

HOUSE ON RENT
It has to be noted that only the expenditure actually incurred on payment of
rent in respect of residential accommodation occupied by the assessee, qualifies
for exemption from income-tax. Thus, house rent allowance granted to an
employee who is residing in a house/flat owned by him/spouse is not
exempt from income-tax.
PROPOSED:

Please provide the following documents to avail the Rent Receipt benefit:

1. Copy of the Rental Agreement with the Landlord on the Stamp Paper duly self
attested by the employee. Please ensure that the rent agreement period
covers the period for which the benefit is requested and/or
2. Please provide the copy of the PAN Card of the landlord (if annual rent paid by the
employee exceeds Rs 1,00,000* per annum, it is mandatory for the employee to report PAN of the
landlord to the employer In case the landlord does not have a PAN, a declaration to
this effect from the landlord along with the name and address of the landlord
should be filed by the employee..) OR
3. Copy of the last Income tax return of landlord filed with the Income tax
Department OR
4. Bank statement from where rent has been paid, highlighting the transactions
with the name of the landlord along with the document to prove the name of
the landlord such as electricity bill etc.
5. Attach the rent receipt copy for April14 which should have the Name of the
Tenant, rental house address, name & address of the Landlord, monthly rent
amount, period of rent, date of payment, etc and it should be signed properly
after affixing the revenue stamp.
6. Rent receipt should be complete in all respects as mentioned in point no. 2
and also signature of landlord should match with the PAN Card/Rent
Agreement.
7. Please note self-declaration in the proposed/actual investment Form is
sufficient for rent paid in case HRA received is upto Rs. 3000/- per month.
Notes:-1. Period for staying on rent should be based on financial year i.e.
April to March, mentioned clearly on the declaration form as the
benefit will be passed accordingly.
2. Insisting on production of copy of rent agreement is a measure
to ensure that HRA exemption is allowed correctly so that the
Company is not accused later of abetting avoidance of tax
which is an offence under the Act. This is employed by most
large companies and is a standard process accepted by the
Income tax Department.

*Earlier, this limit was Rs.2 Lac which has been revised to Rs.1 Lac vide
CBDT circular No.8/2013 dated 10th October, 2013.

ACTUAL PROOF:
1. One month rent receipt is required for each quarter at the time of submission
of final proofs except in case where HRA received by employee does not
exceed Rs 3000/- per month. In such case employee shall be required to give
a self-declaration.
2. Benefit will not be passed finally for particular quarter for which rent receipt
has not been submitted or rent agreement does not cover the period for which
the rent receipt is provided.
B.

HOUSE LOAN
In the case of self-occupied property a normal deduction of Rs. 30,000/- is
allowable in respect of interest on borrowed capital. However, a deduction on
account of interest up to a maximum limit of Rs. 2,00,000/- is available if such
loan has been taken on or after 1-4-1999 for constructing or acquiring the
residential house and the construction or acquisition of the residential house out
of such loan has been completed within three years from the end of the
financial year in which capital was borrowed. Such higher deduction is not
allowable in respect of interest on capital borrowed for the purposes of
repairs or renovation of an existing residential house. If the house is
given on rent then the interest is allowable without any limit. However the
rental income has to be declared.
Interest payable by an employee in respect of funds borrowed during the period
during which the property is under construction, is deductible in five equal
annual installments commencing from the year in which the construction is
completed.
PROPOSED:

Please attach the following documents:

1. Provisional certificate of the Bank having the split of Interest and Principal to
be repaid during the year ending March 15.
2. In case 20% of accumulated interest, which pertains to period in which the
property was under construction, is claimed as deduction the bank certificate
having the split of Interest and Principal repaid for all such years is to be
given.
3. Copy of Ownership proof such as Sale Deed / Power of Attorney / etc. is to be
provided when this claim is made for the first time.
4. Declaration Form duly filled and signed mentioning the amount of Interest and
income from house, if any.
5. In case, employee is staying on rent and claiming tax benefit of house rent
allowance (HRA), Rental income or Fair rent which ever is higher from house
for which the Loan is taken is required to be added in Declaration Form while
claiming deduction of interest on borrowed capital except where the employee
is posted at far location from native place and house is occupied by

Parents/family or it is vacant for the full year. Please propose this benefit only
if you are sure that you are getting possession of the house in the current year
as you have to provide copy of the possession certificate of the House and
proof of occupancy of the house such as Electricity Bill, Telephone bill,
Municipal tax receipt, etc at the time of submission of final proofs.
In case, house loan is in joint name with another person/spouse, declaration is
required from the other person/spouse for not claiming the benefit ACTUAL PROOF (
TO BE SEEN WHETHER TO BE MENTIONED AT THIS STAGE OF NOT)
1. Please attach Latest provisional certificate from the bank i.e. on and after 1st
Dec 14, for Interest and Principal repaid during the year. This is required to
take care of any change in repayment during the year or to prove that there is
no change.
2. In case 20% of accumulated interest, which pertains to period in which the
property was under construction, is claimed as deduction the bank certificate
having the split of Interest and Principal repaid for all such years is to be
provided.
3. Declaration Form duly filled and signed, showing the rental income of the
house, if any.
4. Copy of the latest occupancy proof of the house i.e. Municipal tax receipt or
Electricity bill or Water bill copy.
Additional deduction of Rs. 1,Lac for Home Loan
New Section 80EE to be introduced to provide for additional deduction of Rs. 1 Lac for
interest on housing loan from any financial institution provided that
1. Individual should not own any residential house property on the date of
sanction of loan
2. Loan should be sanctioned between 1 April 2013 and 31 March 2014
3. Loan amount should not exceed Rs.25 Lacs.
4. Value of house property should not exceed Rs. 40 Lacs.
5. If deduction of Rs. 1 Lac under this section has not been fully claimed during
the FY 2013-14, unutilized limit would be carried forward to current year i.e
2014-15.
Actual Proof:
1. Declaration
2. Loan Sanction letter
3. Copy of registry or allotment letter showing the cost of house
C.

SAVINGS
All employees can have the benefit of savings up to the maximum of Rs.1.5
Lac. Savings allowed under section 80C is Rs.1.5 Lac and savings can be made
under various schemes such as LIC, NSC, PPF, Post office time deposits for 5
years or more, Tuition fee paid to any university, college, school or other
educational institution situated in India, for a fulltime course(includes play
school activities, pre-nursery and nursery classes) for two Children, but do not
include the amount representing payment in the nature of development fees or
donation or capitation fees or payment of similar nature, Principal repaid for

House Loan, ELSS, Pension Policies, Designated Fixed Deposits with Nationalized
banks for 5 years.
It is very important to note that in case of deduction under section 80C is
claimed for Life insurance policy premium payment then employees are
required to furnish declaration as per format attached in mail for following:
(1) For Life Insurance policy issued up to 31st March, 2012, I have not claimed
deduction under section 80C of the Income Tax Act, 1961 for such policies
where premium paid exceeds 20% of sum insured covered in the policy.
(2) For Life Insurance policy issued on or after1st April 2012, I have not claimed
deduction under section 80C of the Income Tax Act, 1961 for such policies
where premium paid exceeds 10% of sum insured covered in the policy.
PROPOSED:

Please attach the following documents:

1. Mention policy no. and amount of premium to be paid during the year along
with premium due dates for Life Insurance Premium Policies.
2. Furnish the copies of life insurance policies to prove nature of the policy i.e
whether it is claimable u/s 80D or 80C.
3. Declaration as mentioned above.
4. Details of amount proposed to be saved in NSCs, PPF, etc.
ACTUAL PROOF:
1. Please note that benefit finally will be given only on production of all payment
receipt copies for all type of savings and furnishing copies of life insurance
policies.
2. PPF benefit will be passed on only on receipt of covering page of Pass book
with PPF account no. and Name of Investor along with the deposit entry page
in the pass book.
3. NSC/FDR/Post office deposit benefit will be passed on only after receipt of
copy of certificate issued by Post office, banks and other recognized bodies
only and not on the basis of agent's certificate /receipt. Please provide copy of
the ELSS statement to claim benefit.
4. In case of ELSS with lock in period of 3 years, Post Office & Bank fixed
Deposits with lock in period of 5 years; kindly furnish the copy of deposit
certificate specified in this regard.
D.

OTHERS (PROPOSED & ACTUAL PROOFS)

INTEREST ON HIGHER EDUCATION LOAN
Benefit is available on the interest repayment on loan, taken from any financial
institution or any approved charitable institution for the purpose of pursuing
his/her higher education or for the purpose of higher education of his spouse or
children or the student of whom he is a legal guardian.
Higher education means full-time studies for any graduate or post-graduate
course in engineering medicine, management, or, for post-graduate course in
applied sciences or pure sciences, including mathematics and statistics;

PROPOSED:

Please attach the following documents:

1. In case of Educational Loan provisional certificate from the Financial Institution

is required mentioning the interest repayable during the year.
2. Duly filled in declaration (Format enclosed).
3. Provide the details of educational program pursued or sought to be pursued.
(i.e. prospectus or any other document meeting the criteria of definition of
Higher education given above.)
ACTUAL PROOF:
1. Final certificate is required to be obtained at the time of submission of actual
proofs.
2. Details of educational program pursued. (i.e. prospectus or any other
document meeting the criteria of definition of Higher education given above.)
HANDICAPPED DEPENDENT
Where a person, has, during the previous year,
1. incurred any expenditure for the medical treatment (including nursing),
training and rehabilitation of a dependant, being a person with disability; or
2. paid or deposited any amount under a scheme framed in this behalf by the
Life Insurance Corporation or any other insurer or the Administrator or the
specified company subject to the conditions specified in this regard and
approved by the Board in this behalf for the maintenance of a dependant,
being a person with disability,
3. The person shall be allowed a deduction of a sum of fifty thousand rupees
from his gross total income of that year.
4. However, where such dependant is a person with severe disability, an amount
of one-hundred thousand rupees shall be allowed as deduction subject to the
specified conditions.
5. Dependant means the spouse, children, parents, brothers and sisters
dependant mainly or wholly on such individual.
PROOF TO BE PRODUCED:
1. Employees proposing benefit u/s 80DD (Disablement) will have to produce the
copy of the certificate on the Prescribed Format from the Government
Hospital.
2. Bills for expenses incurred but not claimed from any insurance policy.
3. Copies of receipts of amount paid to insurance companies.
4. The validity of the certificate should cover whole of the year under
consideration.

DISABILITY OF EMPLOYEE/SELF

1. If an employee is certified by the medical authority to be a person with

disability exceeding 40%, there shall be allowed a deduction of a sum of fifty
thousand rupees.
2. However, where such individual is a person with severe disability exceeding
80%, a higher deduction of seventy-five thousand rupees shall be allowable.
PROOF TO BE PRODUCED:
1. Every individual claiming a deduction under this section shall furnish a copy of
the certificate issued by the medical authority in the prescribed, form
2. The validity of the certificate should cover whole of the year under
consideration.
MEDICAL INSURANCE PREMIUM
A deduction can be allowed for a sum not exceeding Rs. 15,000 per annum to
keep in force an insurance on the health of the self or family An additional
deduction of Rs. 15,000 per annum will be allowed to an individual who pays
medical insurance premium for his/her parent or parents. In case premium is
paid for the persons who are senior citizens such deduction will be for Rs.
20,000. The deduction will be available to the extent payment is made by any
mode of payment other than cash out of their income chargeable to tax to keep
in force an insurance on the health of the self or on the health of the spouse,
dependent parents or dependent children
PROPOSED:

Please attach the following documents:

1. Mention policy no. and amount of premium to be paid during the year along
with premium due dates for Premium Policies.
ACTUAL PROOF:
1. Please note that benefit finally will be given only on production of all payment
receipt copies.
DONATIONS MADE FOR CHARITABLE PURPOSE
Benefit u/s 80G (Donation), if any, should be claimed by the employees directly
in their returns except in situation where such deduction is made from the
salary of the employee and the employer pays a consolidated payment to the
following funds
1. Prime Ministers National Relief Fund
2. Chief Ministers National Relief Fund
3. Lieutenant Governers Relief Fund
E.

OTHER INCOME

1. Employees should deposit the tax directly on income other than salaries and
consider the same in their personal returns. This is suggested because as per
income tax act tax should have been deducted from the salary of the
employee and not collected.
2. However tax can be deducted from salaries in case of any other income on
declaration duly signed.
3. The other income declared as above will be subject to same rate of TDS as is
applicable in case of salary income i.e. no concessional rate can be given
while calculating tax on salary including tax on other income.
4. In case employee declare interest income from saving bank account as other
income, then deduction u/s 80TTA maximum up to Rs.10000/-, subject to
actual interest income declared, will be considered.

F.

SELF LEASED CLA

1. CLA paid will be treated as Rental income in case the payments are being
made in the Name of employee or his spouse as company is liable to deduct
tax correctly.

2. Please note that CLA perquisites will be charged @15% in cities having
population exceeding 25 lac, 10% in cities having population
exceeding 10 lac and 7.5% in cities having population less than 10
lac, of Basic & all taxable allowances as per income tax rules or the
amount of CLA paid, whichever is lower. Please note that amount, if any
recovered from employee, will be reduced from the perquisite charged.
G.

PERQUISITE ON USE OF VEHICLE:

Employees using company owned car are charged a perquisite amount of Rs.
1800/2400 (Plus Rs.900 in case drivers salary is reimbursed by company) per month.

Employees using self owned car or any other vehicle for conveyance are charged a
perquisite amount of expenditure on vehicle as reduced by Rs. 1800/2400(Plus
Rs.900 in case drivers salary is reimbursed by company) per month.
Employees using self owned other vehicle for conveyance are charged a perquisite
amount of expenditure on vehicle as reduced by Rs. 900 per month.
Employee
has to submit claim on monthly basis so that the exemption benefit
mentioned above can be provided correctly. For example, if an employee
submit claim for a quarter on a single voucher, system will give the benefit
only for one month.

H. GUEST HOUSE PERQUISITE

Employees staying in the guest house are required to be charged perquisite as

per income tax rules which is @15% in cities having population exceeding 25
lac, 10% in cities having population exceeding 10 lac and 7.5% in cities having
population less than 10 lac. Please note that Guest House charges, if
deducted, will be reduced from the perquisite charged.

I.

GENERAL
1. Any investment/House loan in joint name should be supported by a
declaration from the employee that the other person/spouse is not claiming
income tax benefit for the same.
2. It will be appreciated that employees should provide on quarterly basis copies
of savings proof / tuition fee / rent receipt / provisional bank certificate in case
of any change in repayment plan due to change in rate of interest/repayment
of principal or for any other reason.

J.

Rajiv Gandhi Equity Scheme

A deduction shall be allowed of 50% of the amount invested under the scheme
subject to upper limit of Rs. 50000/-. This deduction shall be allowed for three
consecutive years beginning from the year in which eligible security was first
acquired.
The deduction under the Scheme shall be available to a new retail investor who
complies with the conditions of the Scheme and whose gross total income for the
financial year in which the investment is made under the Scheme is less than or
equal to Rs. twelve Lacs.
new retail investor means the following resident individuals:(a) any individual who has not opened a demat account and has not made any
transactions in the derivative segment as on the date of notification of the
Scheme;
(b) any individual who has opened a demat account before the notification of the
Scheme but has not made any transactions in the equity segment or the
derivative segment till the date of notification of the Scheme,
and any individual who is not the first account holder of an existing joint demat
account shall be deemed to have not opened a demat account for the purposes of
this Scheme.
eligible securities means any of the following :-

(a) equity shares, on the day of purchase, falling in the list of equity declared as
BSE-100 or CNX-100 by the Bombay Stock Exchange and the National Stock
Exchange, as the case may be;
(b) equity shares of public sector enterprises which are categorized as Maharatna,
Navratna or Miniratna by the Central Government;
(c) Units of Exchange Traded Funds (ETFs) or Mutual Fund (MF) schemes with Rajiv
Gandhi Equity Savings Scheme (RGESS) eligible securities as underlying, as
mentioned in sub-clause (i) or sub-clause (ii) above, provided they are listed and
traded on a stock exchange and settled through a depository mechanism;
(d) Follow on Public Offer of sub-clauses (a) and (b) above;
(e) New Fund Offers (NFOs) of sub-clause (c) above;
(f) Initial Public Offer of a public sector undertaking wherein the government
shareholding is at least fifty-one per cent. which is scheduled for getting listed in
the relevant previous year and whose annual turnover is not less than four
thousand crore rupees during each of the preceding three years;

Actual Proof:
1. Copy of Form A submitted with the depository participants
2. Copy of Form B submitted with the depository participants
3. Annual demat statement of the eligible securities invested in or traded
through the demat account to the demat account holder issued by Depository
participant.
K. Deduction Under Section 80TTA of income tax act, the deduction is allowed
on saving account interest up to Rs. 10000/- per annum subject to actual amount
of interest declared by employee as other income as mentioned in point E. .
This deduction is available to interest on saving account and not to Fixed Deposit.
The saving account may be with any of the three mentioned below.
1- Any bank or banking company
2- Co-operative society which is in the business of banking.
3- Post office.
L.

NON AVAILABILTY OF PAN:

If an employee has not provided PAN he will be liable to TDS @ 20% or normal
rate of TDS on salary, whichever is higher.