Well begun is half done. This famous quote by Aristotle is timeless and also relevant across functions and industries even today.
POI or proof of investment is the talk of the town when the end of the financial year is drawing near. But employees declare their proposed investments, at the beginning of the year, based on the proof that can be produced later. Therefore, they need to work backwards with a question in mind: Will I be able to produce the mandatory proof?
Dilip Mohanlal Thakkar, former head of payroll & compliance, Voltas Limited, joined us at our Parichay‒Ask the Expert webinar to discuss various aspects of POI (proof of investment) submission. He also gave us practical advice to help employees and employers handle the process more efficiently. Here’s the gist of what was covered during this interactive session.
Every employee has to declare how much and where he/she proposes to invest money during the course of the financial year. Since the employer makes tax deductions based on this information, accuracy and transparency are vital. Improper submission of POI can result in higher IT deduction and hard feelings!
The management of the POI process can be pretty taxing for HR professionals. There's a possibility of missing out on something while juggling multiple tasks. Featured below
is a checklist to help ensure that there are no last-minute hiccups due to oversight or delay.
A word of caution: This is not an exhaustive list.
When the investment proof documents are not submitted correctly, and on time, HR/payroll is forced to deduct the applicable taxes from their employees’ salaries. There are scenarios where the employees complain of a lower take-home salary and the HR has to rerun the payroll. If the tax has already been paid to the government, the concerned employees have to claim a tax refund when filing IT returns. All of this can be averted if the process is followed thoroughly.
Here’s a small list of some challenging scenarios in POI submission:
Can I claim a tax exemption for my spouse’s medical expenses? What are the tax benefits on the purchase of an electric vehicle? Are gift vouchers and food coupons exempted? If I have paid a Mediclaim premium and also purchased medicines for a senior citizen, can I claim a deduction for both?
These are only a few of the many questions fielded by the speaker during our Parichay‒Ask the Expert webinar. Find out if he has an answer to yours.