INCOME T AX P ROOF GUIDELINES

Tax Proof Submission Guidelines - 1

INCOME T AX P ROOF GUIDELINES

Content
Objective ---------------------------------------------------------------------------------------------------------------3
Choice of Regime -----------------------------------------------------------------------------------------------------3
Section 10 Exemptions ---------------------------------------------------------------------------------------------3
HRA ------------------------------------------------------------------------------------------------------------------3
Chapter VIA Deductions -------------------------------------------------------------------------------------------4
Deductions ---------------------------------------------------------------------------------------------------------4
Proof to be submitted --------------------------------------------------------------------------------------------4
Guidelines ----------------------------------------------------------------------------------------------------------4
Maximum Exemption Allowed ---------------------------------------------------------------------------------4
80D Medical Insurance ------------------------------------------------------------------------------------------4
80DD- Maintenance /Medical treatment of Handicapped dependents -------------------------------4
80E– Education Loan Interest Benefit -----------------------------------------------------------------------4
80U-Deduction in case of Disability-Self --------------------------------------------------------------------4
80EE-First time Home Buyers ---------------------------------------------------------------------------------5
80EEA-Home Loan for Affordable Housing ----------------------------------------------------------------5
80EEB- Loan for Electric Vehicles ----------------------------------------------------------------------------5
80CCD(1B)-Notified Pension Scheme -----------------------------------------------------------------------5
Loss on House Property ---------------------------------------------------------------------------------------------6
Section 80C deductions (Maximum Deduction allowed up to Rs.1.50 Lakh) additional 50,000
U/s 80CCD(1B) for NPS. -------------------------------------------------------------------------------------------7
PPF ------------------------------------------------------------------------------------------------------------------8
Fixed Deposit in a Scheduled Bank --------------------------------------------------------------------------8
ULIP ------------------------------------------------------------------------------------------------------------------8
Mutual Funds / ELSS --------------------------------------------------------------------------------------------8
Housing Principal -------------------------------------------------------------------------------------------------8
2022-2023 TAX RATES --------------------------------------------------------------------------------------------9
Differentiation on the New and Old Tax Slabs in the said range --------------------------------------9
Break-even analysis between New & Old tax regime -------------------------------------------------- 10
Retirals taxed beyond Rs.7.5 lakh per annum ----------------------------------------------------------- 10
Employee’s Contribution to PF attracts Tax on Interest ----------------------------------------------- 10
Frequently Asked Questions ------------------------------------------------------------------------------------ 11
HRA ---------------------------------------------------------------------------------------------------------------- 11
Income from House Property -------------------------------------------------------------------------------- 11

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 INCOME T AX P ROOF GUIDELINES

Objective
It is new financial year and it is time for salaried employees to submit tax proofs to substantiate the
declarations that they had made in the beginning of the financial year.

Choice of Regime
Choice is given to every individual to opt the regime of taxation, which is basically the extent of exemption
and the slab of tax. A new regime comes with nil exemption and a different tax slab. Detailed tax slab is
given in the document to aid calculation.

Section 10 Exemptions

Quantum
Headers Proofs to be submitted Guidelines

HRA Proof of occupation of • Rent receipts only. Exemption Criteria

the rented house • Receipt should carry the month,
for the period signature, name & address of the 1. Actual HRA received
when the house is owner along with the name of the for the year.
occupied (Rule 2A Tenant and address of the rental
read with Section property. 2. Rent paid – 10% of
10(13A)) • Rent agreement alone does not Basic
constitute proof of payment of rent
Monthly rent receipts • Rent Receipts should be of the 3. 40% of Basic or 50% of
from April 2022 till Jan current financial year only along Basic (in case of Metro
2023. Feb & March will with revenue stamp (April 2022 – cities)
be considered on Jan 2023)
projection basis. • Rent Receipts should be for the Least of the above is HRA
period with the current employer Exemption for Tax
Note: Employees may only. Exemptions for the period
retain copy of rent not with the current employer
receipt for their future cannot be considered.
reference and record. • Revenue stamp is mandatory if the
rent paid is greater than Rs.5000/-
per month.
• Landlord PAN is mandatory if the
rent paid is greater than Rs.8333/-
per month.

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Chapter VIA Deductions
Deductions Proof to be submitted Guidelines Maximum Exemption
Allowed
80D Medical Photocopy of receipt • Receipts should be of the current Self , Spouse & Children-
Insurance issued by the Insurance year only (Apr’22 – Mar’23) 25000/-
Company • Receipt should contain that it is Dependent
towards Mediclaim insurance, and Parents<60yrs – 25000/-
it is eligible for deduction under Dependent
Sec 80D. Parents>60yrs-50000/-
• Policy can be in the name of
individual or his/her spouse, If the policy is more than
dependent parents, and children. a year, the exemption
• Preventive health checkup to Self as eligibility will be on pro-
well as parent is allowed up to rated basis of premium
Rs.5000/- and is subject to the paid.
overall limit of Rs.75000/-
• Previous year receipts (if the
premium paid for more than a year)
to claim current FY benefit on
proration basis.
80DD- Photocopy of certificate
Maintenance issued by the competent • Proof required in Photocopy Deduction limited to
/Medical medical authority in a • Where condition of disability Rs.75000 for
treatment of Government Hospital, requires reassessment, fresh (>=40% and <80%
Handicappe with a self-declaration, certificate to be obtained after its disability),
d certifying amount spent expiry to continue claiming the Rs.125000 (>=80%
dependents on treatment, training or deduction disability)
rehabilitation of the
handicapped dependent,
or premium receipt of the
amount paid to LIC/UTI
for the policy.
80E– Letter / certificate from • Interest paid on loans taken for Self, Spouse and
Education the Bank / Financial Higher Education deduction is Children
Loan Institution specifying the available only for the consecutive No capping of maximum
Interest following: first 8 years limit – Actual
Benefit • Said loan is an • Eligible only if loan is availed by the interest paid by the
Educational Loan. employee for pursuing his / her employee is allowed
• Amount of interest higher education or higher as deduction.
paid on the loan in education of his/her relatives, i.e. Principal is not allowed
the current year spouse/any child / legal guardian for for exemption.
(Apr’22–Mar’23) full time studies
• Loans availed only from FI / Bank is
eligible.
• No Limit on deduction on interest
payment.
• Interest paid in the current year only
eligible (Apr’22–Mar’23)
80U- Photocopy of certificate • Where condition of disability
Deduction in issued by the medical requires reassessment, fresh
case of certificate to be obtained after its
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Disability- authority along with the expiry to continue claiming the Limited to Rs.75000
Self return of income. deduction (>=40% and <80%
disability),
Rs.125000 (>=80%
severe disability)

80EE-First Photocopy of loan • Loan should have been sanctioned Limited to Rs.50000/-
time Home sanction letter & in 2016-17
Buyers declaration regarding • Loan amount should not exceed 35
property value and first lakhs
time home buyer • Value of the house should be within
• Provisional 50 lakhs
certificate from • Should not own any other residential
the Housing property in the same name.
Finance • Amount of interest allowed as
Company / deduction under this section is not to
Bank. be claimed as deduction under any
other section of this act.
80EEA- Photocopy of loan • Loan should have been taken from Limited to Rs.150000/-
Home Loan sanction letter & an approved financial institution
for declaration regarding • Should have been approved during
Affordable property value, area and the year 2019-22
Housing first-time home buyer • The stamp value of the house is less
• Provisional than 45 lakhs
certificate from • The buyer should not have any other
the Housing house in his name at the time of loan
Finance sanction.
Company / Bank
80EEB- Loan Photocopy of loan • Loan should have been taken from Limited to Rs.150000/-
for Electric sanction letter with the bank or NBFC
Vehicles purpose & declaration • Should have been taken between 1st
regarding the type of April 2019 to 31st March 2023.
vehicle & date of • Only the interest part is eligible for
purchase of the same. deduction
• Provisional • The assesse should not own any
registration other electric vehicle on the date of
certificate copy sanction of this loan
from the
financial
institution
(banks, NBFCs,
etc.)
80CCD(1B)- Copy of the stamped • Any contribution by employer is not Limited to Rs.50000/- or
Notified deposit receipt, paid allowed for any deduction under actual contribution
Pension during current financial section 80C whichever is lesser. This
Scheme year and copy of the is over and above the
Passbook with clear limit of 1.5 lac under
mention as NPS Account section 80C

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Loss on House Property
Income/ Loss Proofs to be submitted
Loss on House ▪ Provisional certificate from the
Property Housing Finance Company / Bank.
▪ Possession certificate from the
builder/society or Electricity bill /
sale deed of the property/
Municipal tax paid receipt
▪ In case of loan under joint Loan/ Co-
applicant, declaration to be signed
by the partner & self in case an
employee wants to avail full interest
for the property owned jointly or
loan availed jointly with another
person. In case of joint
loan/property wherever declaration
is not provided, exemption will be
provided proportionately.
Guidelines
▪ Calculation of loss is
necessary in case of let-out
properties.
▪ A complete declaration
regarding the date of
completion, nature of
occupancy, and other
information should be
provided as per the format
available in the portal & is
mandatory for claiming this
exemption.
▪ Interest paid in the current
year only (Apr’22–Mar’23) is
eligible for exemption.
▪ The benefit of deduction is
applicable only after
occupancy of the house and
Pre-EMI interest (after
adjusting deduction claimed
already under 80EE) is
deductible in 5 equal
installments starting from the
year when the construction is
completed or property is
acquired. The relevant proof
and the calculations is to be
attached.
▪ In case of Housing Loan
jointly availed, the employee
should declare his
percentage of share in the
loan.
▪ In case of self-occupied
property employee cannot
claim both HRA exemption as
well as Loss from house
property where the property
is in the same city.
▪ In case of Let out property, it
is mandatory to enclose the
computation working.
▪ Declaring notional rental
income is mandatory in case
of vacant property to claim
the benefit under let out –
Loss on House Property.
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Deduction Details
Self-Occupied & Let-
out: Capped to a
maximum of
Rs.2,00,000/- PA
In the following cases
the above limit of Rs
2,00,000 for SOP shall be
reduced to Rs. 30,000
– Loan borrowed before
01-04-1999 for any
purpose related to
house property.
– Loan borrowed after
01-04-1999 for any
purpose other than
construction or
acquisition.
– If
construction/acquisition
is not completed within
5 years from the end of
the financial year (3
years till financial year
2015-16) in which
capital was borrowed.
For example, a loan is
obtained for
construction/acquisition
on 28 Oct 2016 then the
deduction limit should
be reduced to Rs 30,000
if the
construction/acquisition
completes after 31
March 2022
 INCOME T AX P ROOF GUIDELINES

Income/ Loss Proofs to be submitted Guidelines Deduction Details

Proofs required in case of let out Let out Property: No separate limit,
property. Income from let-out property is
• Declaration for loss from Let out mandatory & covered under the overall
property limit of Rs.200000/- under this section.
• Computation of Loss from Let out
property (Template attached).
• Provisional loan certificate for the Let Out property Calculation :
current financial year
• Possession certificate from builder Rent Received XXX
or Sale Deed. Minus - Municipal Tax XXX
• In case employee is 2nd applicant Net Annual Value (NAV) XXX
(Bank Loan) then bank statement to Minus - 30% on NAV - Repair & XXX
be submitted as a proof of payment. Maintenance
Minus–Interest paid on housing loan
XXX

Income / Loss from Let-out Property

XXX
Section 80C deductions (Maximum Deduction allowed up to Rs.1.50 Lakh) additional 50,000 U/s
80CCD(1B) for NPS.

Investment Proofs required to be submitted Guidelines

80CCC Photocopy of receipt issued by the • Policy from any approved company by IRDA (Insurance
(Pension Insurance Company Regulatory & Development Authority).
Policy) • Late payment fees will not be considered as premium
paid.
• Receipts should be of the current year only (Apr’22–
Mar’23)
• Policy should be in the name of individual only

Life Insurance Photocopy of all premium receipts
Premium issued by the Insurance Company.
• Policy from any approved company by IRDA.
• Late payment fees charged will not be considered as
premium paid.
• Receipts should be of the current year only (Apr’22–
Mar’23)
• Policy can be in the name of individual, spouse, &
children.
• In case of premium receipts for covering the life
insurance of spouse & Children, the employee must
provide a declaration stating their relationship in the
portal while entering the details of premium paid.
• Any premium due and payable after the proof
submission due date need to be accompanied by the
previous year premium receipts and the exemption will
be granted based on these receipts.

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• Deduction will get limited to maximum of 20% of sum
assured if policy issued on or before 31st March 2012
and 10% of sum assured after 31st March 2012
PPF Photocopy of stamped challan or PPF • Public Provident fund account can be in the name of
passbook individual, spouse & children.
Maximum contribution allowed under this scheme is
Rs.150000/-
Contributions made during current FY Apr ’22 – Mar ’23.
Fixed Deposit Photocopy of the Receipt/certificate Term deposits against tax saving scheme for a minimum
in a issued by the scheduled bank period of 5 years with a scheduled bank are eligible for
Scheduled deduction
Bank Deposits made during current FY Apr ’22 – Mar ’23.
ULIP Photocopy of Statement • Receipts / Statements / Bonds / Certificates should be
of the current year only (Apr’22–Mar’23)
Mutual Funds Photocopy of Statement – Specified • Deduction is provided only for Tax Saving Mutual
/ ELSS funds only. Fund.
NSC • Only for Assessee. In case of ULIP, it can be in the
Photocopy of Certificates name of his/her Spouse & Children.
• Mutual fund / ELSS Installments due and paid after
the proof submission due date need to claimed by the
individual at the time of filing return with the IT
Dept.
• Mutual fund/ELSS counter foil will not be accepted,
only statements are accepted.

Postal Photocopy of the stamped challan or • Deposit against tax saving scheme for a fixed term
Deposits Passbook period of not less than 5 years
• Deposits made during current FY Apr ’22 – Mar ’23.
Children Tuition fees paid supported by • Payment other than transport, donation/capitation
Education receipts issued by the school, college, fee, uniform, books, & shoe will be considered under
fees university, or educational institution this section.
within India. • Receipts should be of the current year only (Apr’22–
Photocopy of receipt to be Mar’23)
submitted. • Donations, Capitation fess, ground fee, etc are not
allowed.

Housing Provisional Certificate from the • The Certificate should clearly distinguish between
Principal Financial Institution/Bank Principal & Interest Component.
• Provisional Certificate should be for the current
Financial Year
• Proof of payment of Registration fee & stamp duty.

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INCOME T AX P ROOF GUIDELINES

2022-2023 TAX RATES

After providing for necessary exemptions and deductions as per rules defined above, ‘Net Taxable
Income’ is arrived. On the ‘Net Taxable Income’ the following tax rates are applied to arrive at the
‘Tax Payable’ for the year.

• Surcharge @ 10%, 15%, 25% & 37% on Tax in case of Net taxable income is >50L, 1C, 2C &
5C respectively.
• Health & Education cess of 4% on tax + surcharge
• Tax rebate of Rs.12500/- for income up to Rs.500000 u/s 87A
• There are no separate slabs for male and female

Differentiation on the New and Old Tax Slabs in the said range

Income Slab Old Tax Rate New Tax Rate Old Tax New Tax
Up to 2.5 lakh Nil Nil 0 0
2.5 to 5 lakh 5% 5% 12500 12500
5.0-7.5 lakh 20% 10% 62500 37500
7.5 to 10 lakh 20% 15% 112500 75000
10 to 12.5 lakh 30% 20% 187500 125000
12.5 to 15 lakh 30% 25% 262500 187500
Above 15 lakh 30% 30% 262500+ 30% of 187500+ 30% of
amount amount
exceeding 15 exceeding 15
lakh lakh

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Break-even analysis between New & Old tax regime

Gross Income Exemptions/Deductions Tax Under New Tax under Old

required to break-even Regime Regime
Under 5 lakhs Nil Nil Nil
650000 75000 27500 27500
750000 125000 37500 37500
1000000 187500 75000 75000
1250000 208350 125000 125000
1500000 250000 187500 187500
2000000 250000 337500 337500

This shows that beyond 15 lakhs, there is no advantage in opting for the new slab. By and
large, on an analysis, the old tax regime is more beneficial to employees, particularly when you
have more exemptions under section 10.

Retirals taxed beyond Rs.7.5 lakh per annum

Retirals like the employer contribution to NPS, PF and Super Annuation will be taxed as follows:

Nature of Retiral Thumb Rule Example Remarks

NPS Up to 10% of basic Basic=300000 Exceeds 10% of basic
plus DA NPS = 360000 by 60000
Provident Fund 12% of Basic 360000 No excess
contribution
Super Annuation Up to 15% of Basic 500000
plus DA

Total of the above Taxable if the sum of NPS+PF+Superannuation Over and above 7.5
the restricted value 360000+360000+500000 lakhs are taxable
crosses 750000 =1220000 12.20-7.5 = 4.7 lakhs

Employee’s Contribution to PF attracts Tax on Interest

Current financial year has brought a new coverage for those employees who contribute to their
PF accounts either through the employer or voluntarily will now have to pay tax on the interests
earned on contribution beyond Rs.2.5 lakhs per annum.
PF department has accordingly opened two PF accounts:
(a) Non-taxable Contribution &
(b) Taxable contribution

Non-taxable contribution will contain amounts deposited in the account up to 2.5 lakhs and
taxable contribution will contain amounts contributed beyond 2.5 lakhs. Interest earned for such
excess amount shall be taxed according to the applicable slab of the employee.

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Income tax department is yet to come up with the modality of charging the interest and the
responsibility of the employer in including it to the taxable income of the employee, while
calculating the taxes for the financial year 2022-23 & for the next years.

However, the interest amount will be known only in the next year, unless otherwise, income tax
department comes out with any rough calculation.

Frequently Asked Questions

HRA
When can you claim HRA?

Any salaried employee can claim HRA if they satisfy the following condition:
HRA allowance is part of the Salary package
The employee is staying in a rented accommodation and paying rent for it
The rent paid exceeds 10% of the salary

What are the proofs to be submitted on claiming HRA?

If the HRA received is less than Rs. 3,000 per month you can avail exemption by submitting duly
filled in, signed declaration form with mentioning rent paid. But if the HRA received is more than Rs
3,000 you need to submit rent receipt to your employer. One rupee revenue stamp affixed with the
signature of landlord receiving the rent, with other details of the rented address, rent paid and name of
the person who rents it, need to be mentioned on the receipt.
Please note landlord PAN with name as per PAN records is mandatory for rental payments exceeding
Rs.100000/- per annum. Declaration on No Pan is not a sufficient evidence and might result in
disallowance of exemption.

Can HRA be claimed if you stay with parents in their house?

Yes, if your parents own the house you can pay them rent. This would make your parents landlord. But
they will have to declare it in their personal income tax return to prevent litigation in the future.
In case your parents don’t pay any tax or are in lower tax slab its good idea to pay them rent.

Can HRA be claimed if you pay rent to spouse?

You cannot claim rent paid to spouse. The relationship between a husband and wife is not commercial in
nature; a husband and wife are supposed to stay together. So, payment of rent to a spouse will not be
accepted by the income tax authorities.

Can HRA exemption as well as a home loan tax benefit be claimed at the same time?
If you have taken home loan for buying a house in a different city from where you are working, you are
eligible to claim both HRA exemption and Home Loan Tax benefits.

Income from House Property

How to compute income from a house property which is let out throughout the year?

Income chargeable to tax under the head "Income from house property" in the case of a let-
out property is computed in the following manner:

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Particulars Amount

Gross annual value XXXX

Less:- Municipal taxes paid during the year XXXX
Net Annual Value (NAV) XXXX
Less:- Deduction under section 24
➣Deduction under section 24(a)) at 30% of (XXXX)
NAV (XXXX)
➣Deduction under section 24(b)) on account
of interest on borrowed capital.

Income from house property XXXX

What is pre-construction period?

 While computing income chargeable to tax under the head "Income from house property" in case
of a let-out property, the taxpayer can claim deduction under section 24(b) on account of interest
on loan taken for the purpose of purchase, construction, repair, renewal or reconstruction of the
property.

 Deduction on account of interest is classified in two forms, viz., interest pertaining to pre-
construction period and interest pertaining to post-construction period.

 Post-construction period interest is the interest pertaining to the relevant year (i.e., the year for
which income is being computed).

Pre-construction period is the period commencing from the date of borrowing of loan and ends on earlier
of the following:

Date of repayment of loan; or

31st March immediately prior to the date of completion of the construction/acquisition of the property.

Interest pertaining to pre-construction period is allowed as deduction in five equal annual instalments,
commencing from the year in which the house property is acquired or constructed.
Thus, total deduction available to the taxpayer under section 24(b) on account of interest will be 1/5th of
interest pertaining to pre-construction period (if any) + Interest pertaining to post construction period (if
any).

Can a property not used for residence by the tax payer be treated as self-occupied property?

A self-occupied property means a property which is occupied throughout the year by the owner for his
residence. Thus, a property not occupied by the owner for his residence cannot be treated as a self-
occupied property. However, there is one exception to this rule. If the following conditions are satisfied,
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then the property can be treated as self-occupied and the annual value of a property will be "Nil", even
though the property is not occupied by the owner throughout the year for his residence:

The taxpayer owns a property;

Such property cannot be actually occupied by him owing to his employment, business or profession
carried on at any other place and he has to reside at that other place in a building not owned by him;

The property mentioned in above (or part thereof) is not actually let out at any time during the year;

No other benefit is derived from such property.

However, it is to be noted that whether to grant exemption considering the above is left to the choice
of the employer only. If the employer does not want to take the risk of allowing exemption under
this consideration, employee can claim while filing his returns at his risk.

What will be the tax implications if a person occupies more than one property for his residence?
Can he treat all the properties as self-occupied (SOP) and claim gross annual value (GAV) as Nil?

The SOP benefit (i.e., treating property as SOP and claiming GAV as Nil) is available for two self-
occupied properties occupied by the owner for his/her residence.

If a person occupies more than one property for his residence, then the SOP benefit will be granted
in respect of two properties (provided it is used only for self-occupation) as selected by him and other
property/properties will be treated as "Deemed to be let-out". Income from deemed to be let-out
property is computed in the same manner as discussed in the case of "Let-out" property.

How to compute income from a property which is self-occupied for part of the year and let out for
part of the year?

At times, a property may be let-out for some time during the year and is self-occupied for the
remaining period (i.e., let-out as well as self-occupied during the year). For the purposes of
computation of income chargeable to tax under the head "Income from house property", such a
property will be treated as let-out throughout the year and income will be computed accordingly.
However, while computing the taxable income in case of such a property, actual rent will be
considered only for the let-out period.

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Registered Office:
Talent Maximus India Private Limited
ASV Adarsh Towers, No. 719, 3rd Floor, Pathari Road,
Chennai – 600002.
Branches: New Delhi, Mumbai, Kolkata, Bangalore,
Hyderabad

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