Hello Anusha,
TDS, or Tax Deducted at Source, is a method of collecting income tax in India, under the Indian Income Tax Act of 1961. Any payment covered under these provisions shall be paid after deducting a prescribed percentage. It is managed by the Central Board for Direct Taxes (CBDT), which is part of the Department of Revenue managed by the Indian Revenue Service.
Here's a brief explanation of how TDS works in an organization:
1. 📄 The employer deducts a certain percentage of the employee's salary as tax. This percentage depends on the income tax slab that the employee falls under.
2. 💼 The deducted tax is then paid to the government by the employer on behalf of the employee.
3. 📈 The deducted amount is reflected in the Form 16 issued by the employer to the employee at the end of the financial year.
Now, coming to your question about tax deductions based on LIC premium receipts and other documents.
Here's how it works:
1. 📑 If you have invested in tax-saving instruments like LIC, PPF, or have incurred expenses under sections like 80C, 80D, etc., you are eligible for tax deductions.
2. 📧 You need to submit proof of these investments to your employer, who will then consider these deductions while calculating your TDS.
3. 🔄 If the tax has already been deducted before you submitted your proofs, the excess tax paid can be claimed as a refund when you file your income tax return.
4. 🏦 After you file your income tax return, if it's found that excess tax has been deducted, the Income Tax Department will refund the excess amount to your bank account.
Remember, the key is to submit the investment proofs to your employer on time, so the correct TDS can be calculated and deducted.
I hope this explanation is clear. If you have further questions, feel free to ask!