Verification of Investment Proof (F.Y.

2010-11)
To
All Employees
Sub: Proof of Investment against your Tax Plan for the year April 2010
to March 2011.
In respect to your Income Tax Plan declared for the period April 2010 to March
2011. Kindly go through the note given below and submit the proof of
investments to enable us to verify the same.
Employees who have declared tax saving investments are required to submit
the proof on or before 25th January 2011 ,failing which the same will not be
considered for tax relief.
The proofs to be submitted are as follows:
1.MEDICAL CLAIMS:
Tax Rules
Those who would like to claim the medical reimbursement under Section 17 of
Income Tax, the exemption can be claimed in a prescribed format which is
available on the cross domain web portal.
2. LTA
Tax Rules
Those who would like to claim LTA under Section 10 of the Income Tax Act, the
exemption can be claimed in a prescribed format which is available on the cross
domain web portal

Tax Rules
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3. RENT RECEIPT:
Employees who have given rent details are required to submit the proof of
having paid the rent.

A. For Employees whose Rent is exceeding Rs.3,000.00 per month:

-The original rent receipt (Annexure III) has to be submitted for the
starting month (either April 2010 or the month during which the employee
has joined the company, whichever is later), and the last month (Dec
2010).
-In case of change in rental amounts, the rent receipt for both the
months (prior to rent change and after the rent change) needs to be
submitted.
-Rent receipt should contain the owners name, Address, Location of
the property and rental amount paid.
-Agreement copy, where the agreement is valid for the period.
i. For Employees whos Rent is less than
or Equal to Rs.3,000.00 per month Duly authenticated Self declaration
(Annexure IV)

4. Section 80C:
LIC Premium/LIC Annuity.

Tax Rules
A. Copy of premium receipt (Provisional receipt are not accepted)]
B. If the premium is due after the cut off date, and a declaration (Annexure
V) stating that the premium will be paid as on due date falling before 31 st
March 2011.
C. Declaration from Spouse/Children stating that they are not claiming rebate
for the premiums paid, in their income tax returns.

Investment in Mutual Funds (ELSS)

Tax Rules

A.

Copy of Bond

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Tax

PPF

Rules
A. Copy of passbook along with the cover page showing investors
name

Principal Loan Repayment for Housing Loan:

Tax Rules
A. Copy of bank payment schedule, date of completion of house and date of
occupation of the house.
A. Bank passbook stating clearly showing the payment of principal and
interest separately and date of completion & Occupation of the house.

Tax Rules

NSC and NSS

A. copy of certificates purchased

Accrued Interest on NSC

Tax Rules
A. Submit Annexure VI
B. Copy of certificates to be enclosed

Investment in Infrastructure /tax saving bonds

Tax Rules
A. Copy of counter folio duly acknowledged by the Bank/Institution
(should contain note about exemption under 80c)

Tax

ULIP

Rules
A. Payment receipt or copy of ULIP Statement

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Tuition Fees

Tax Rules
1. Payment receipts

Contribution to LIC/UTI Pension Fund and contribution to ICICI PRU Forever Life

B. Copy of premium receipt

C. If the premium is due between 01 Jan 2011 and 31 st March 2011, a
declaration (Annexure VII) stating that the premium will be paid as on
due date falling before 31st March 2011.
Investment on Fixed deposits:

The investment made on fixed deposits for a minimum period (5 Years) in a

Nationalized Bank or authorized by the RBI. The scheme should clearly state that the
above investment qualifies for deduction of for Sec 80C.
Notified Pension Fund

Contribution to notified pension fund set up by Mutual Fund or UTI (i.e. Retirement
Benefit Unit Scheme of UTI and Kothari Pioneer Pension Plan of Kothari Mutual Fund)

Note on Section 80C Investments:

In case of any other investment qualifying for Section 80C, copy of

payment of such sum shall be furnished.
The above proof should show either the employee name, spouse name or
name of child of the employee.
Any inaccuracy is to be promptly informed, so that required corrective
measures can be taken.
Amount of deduction under section 80C is computed as under:
- Gross qualifying amount
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Rs. 1,20,000/- [of which 20000 is exclusively for Notified Long

Term Infra Bonds 80CCF]
Whichever is lower. It may be noted that the aggregate amount of
deduction under Sections 80C, 80CCC and 80CCD, 80CCF cannot exceed
Rs 1,20,000/-

5. Section 80 D:
Tax
Rules
Medical Insurance Premium - (Section 80D)

A. Copy of premium receipt

B. If the premium is due between 01 Jan 2011 and 31 st March 2011, a
declaration (Annexure VIII) stating that the premium will be paid as on
due date falling before 31st March 2011.

6. Section 80 DD:
Tax
Rules
Medical Treatment/Contribution to fund for maintenance of handicapped
dependant - (Sec 80DD):

A. Proof of expenditure incurred

b. Copy of the policy
C. Proof of dependent being handicapped as certified by physician,
oculist or a surgeon working in government hospital.

7. Section 80 DDB:
Tax
Rules
Medical treatment in case of specified ailments or disease (Sec 80DDB)

A. Proof of expenditure incurred

B. Certificate in the prescribed form i.e., Form No. 10-I, from any
doctor registered with the Indian Medical Association with a postgraduate qualification.
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8. Section 80 E:
Tax
Rules
Deduction in respect of interest on loan taken for higher education for self

B. Copy of Certificate issued by the bank or the Financial Institution.

(should contain interest details)

9. Section 80 U:
Tax
Rules
Deduction in respect of totally blind or physically handicapped employee - (Sec
80U)

A. Certificate from a physician, surgeon, an oculist or a psychiatrist, as

the case may be, working in a government hospital.
B. Where the condition of disability requires reassessment, a fresh
certificate from the medical authority shall have to be obtained
after the expiry of the period mentioned on the original certificate in
order to continue to claim the deduction.
10. Interest on housing loan:
Tax
Rules
Declaration in Form 12C (Annexure IX) having date of completion (if
completed) and date of occupation (if occupied), duly supported by detailed
computation of Income From House property and certificate from the person,
from whom the capital was borrowed, stating the interest &principal payable,
for the year.
In case of Housing Loan taken by Joint applicants, a declaration
(Annexure X) to be obtained from the employee regarding the amount or ratio
that he would be claiming during the Current FY.
In the absence of the above, loss from house property would not be considered.
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11. Previous Employment Salary:

Form 16/salary certificate with 12B for previous employment

period (during 2010-11) in case of having worked for multiple
companies duly signed by the respective authorized signatory

In absence of above forms ,subsequent IT statement with

authorized authentication has to be submitted

12. Important Note:

If the proof of investment does not reach us on or before 25 th

January 2011, we shall be forced to disallow the plan and recompute the tax to be deducted from Jan-11 to Mar-11.

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MEDICAL CLAIMS
For the purpose of valuation of medical facilities/bills, family means
Spouse and Children of the Employee
The Parents, Brothers and Sisters of the Employee who are wholly or mainly dependent
on the Employee.
The Employee should attach along with return of Income a certificate from Hospital, which
specifies nature of disease as well as amount of expenditure.

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LTA
VALUATION OF LEAVE TRAVEL CONCESSION SEC 10(5)

Tax Benefits
Travel Expenditure spent by the Employee on himself of his family is exempted from tax.
Amount Exempted

Family means

: (i) Economy class Air fare of a National Carrier or [if traveled by Air]
(ii) First Class AC Rail fare [if traveled by Rail]
(iii) First Class AC Rail fare [if traveled by other transport but the
Journey is Possible by train]
(iv) First Class Public Transport [Where there is no Air, Rail Transport
but a recognized Public Transport Exists].
(v) First Class AC Rail fare [if no recognized Public Transport System
Exists]
: (i) Spouse and Children.
(ii) Parents, Brothers & Sisters of the Employee who are wholly
dependent on him.
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Block

: The Exemption can be got only twice in a Block of Four Years.

Current Block is 1st Jan 10 to 31st Dec 13.

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HOW THE HRA EXEMPTION IS CALCULATED? SEC10(13A)

Where the Residential House is situated in Metro [Bombay, Calcutta, Delhi, Madras]
Calculation
Least of the following is exempt
1) 50% of Salary (Basic + DA)
2) House rent allowance received by the employee in respect of the period during which
rental accommodation is occupied during the Financial Year.
3) Rent Paid in excess of 10% of Salary (Basic + DA).
Where the Residential House is situated in non metro cities.
Calculation
Least of the following is exempt
1) 40% of Salary(Basic + DA)
2) House rent allowance received by the employee in respect of the period during which
rental accommodation is occupied during the Financial Year.
3) Rent Paid in excess of 10% of Salary (Basic + DA).
NOTE:
1)
2)
3)

No HRA Exemption in the following cases

If the Employee lives in his own house
If the Employee lives in a House where he does not pay rent for the period
If the rent paid does not exceed 10% of salary (Basic + DA)

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LIC POLICY
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Whatever may be premium paid during this financial year will be treated as eligible investments
The policy can be taken on employee or his dependents.
Dependent should not claim the Deduction towards their income tax liability.

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MUTUAL FUNDS
Subscriptions towards notified mutual funds or UTI [Retirement Benefit Pension Fund of UTI]
during the year are eligible for deductions under 80C.
The Certificate/Bond should be in the name of the Employee.
The receipt should contain description of the eligibility of the investment under Sec 80C.
Counter folio, duly signed by the Bank/Institution should also be given as declaration.

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PPF
Investment made during this financial year in PPF is available for deduction as PPF.
The amount can be invested in the name of employee, or in the name of a minor of whom he is a
guardian.
There is no maximum ceiling under the Income Tax Act. However, under public provident fund
scheme, minimum contribution is Rs 500/-.

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Principal Loan Repayment for Housing Loan:
Repayment of housing loan / stamp duty for purchase of house only for Self-occupied property.

Repayment of Principle payment paid during the year.

Repayment of amount borrowed by the Employee from
a) Bank
b) LIC
c) National Housing Bank
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d) Public company doing housing loan finance business

e) Employer deducting Loan
Repayment of loan taken for Stamp fees and registration charges for the purpose of
transfer of such house property to the Employee {paid during this assessment year}.
The following amounts are not eligible under this act.
Any expenditure claimed under Sec 24.

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NSC and NSS

Amount paid towards purchase of NSC Documents.

Amount should be invested during this financial year.
NSC Certificate should be in the name of the Employee only.

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Accrued Interest on NSC

NSC Certificate should be in the name of the Employee only.

According to rule 15 of the NSC (VIII Issue) Rules, 1989, the interest as specified in the
Table (see Annexure) shall accrue to the holder of the certificate at the end of each year
and the interest so accruing at the end of each year up to the end of the fifth year shall
be deemed to have been re-invested on behalf of the holder and aggregated with the
amount of face value of the certificate.
Accrued Interest is added to income under other income.

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Investment in Infrastructure /tax saving bonds

Amount paid towards Subscription of Infrastructure bonds.

Amount should be invested during current Financial year
Name of the Employee should be specified in the investment.
Investment should be in the name of the Employee only.

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ULIP

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Contribution for participating the unit-linked Insurance plan of Unit Trust of India / LIC Mutual
Fund {Formerly known as Dhanraksha Plan of LIC Mutual Fund}
ULIP should be taken on Employees life, life of the spouse or any child (child may be dependent /
independent, male/female, minor/major or married/unmarried).

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Tuition Fees

Allowed up to maximum of their 2 children.

Admission fee in nature of donation, development fees, and contribution towards
admission will not be allowed.
Tuition Fees for Full Time Education only will be allowed as deduction under 80C.
Only tuition fees are allowed.
Not for the self-education.

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Medical Insurance Premium - (Section 80D)

The Employee may be resident/non-resident or Indian Citizen/foreign Citizen.
Insurance premium is paid by the Employee in accordance with the scheme framed in this behalf
by the General Insurance Corporation of India and approved by the Central Government The
Scheme is also known as mediclaim insurance policy. The amount deposited in a similar scheme
of any other insurer who is approved by the Insurance Regulatory and Development Authority
shall also be eligible for deduction.
The Mediclaim policy can be taken on the Employee, Spouse, dependent parents or dependent
children of the Employee.
Deduction available is Rs 15000/- or the premium paid whichever is lower for self, spouse &
children, an additional amount of Rs.15,000 is allowed if the coverage is for parents ( Rs. 20000 is
allowed in case the parents are Senior Citizen( 65 years or more in age) or the premium paid
whichever is lower, will be the deduction available.

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Section 80 DD:
The Employee may be resident/non-resident or Indian Citizen/foreign Citizen.
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The Employee has incurred expenditure for the medical treatment (including nursing),
training and rehabilitation of a dependent (being a person with disability).

The Employee has paid or deposited under any scheme framed in this behalf by the Life
Insurance Corporation or any other insurer, or the administrator or specified company and
approved by the Board in this behalf for maintenance of dependent (being a person with
disability)

Dependent being a person with disability, should satisfy the following points

Dependent means Spouse, children, Parents, Brothers and sisters of the Employee who are
wholly and mainly dependent on Employees income
Dependent should not have claimed any deduction under section 80U in computing his/her
total income in the previous year.

Deduction available is
Rs 50000/- for Partial Disability ( 40% Disability )
Rs 100000/- for Severe Disability ( 80% Disability )

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Medical treatment in case of specified ailments or disease (Sec 80DDB)

The Employee may be resident/non-resident or Indian Citizen/foreign Citizen.
The Employee has actually paid the amount for the medical treatment of a specified disease or
ailment as prescribed by the Board under rule 11DD.
Dependent means Spouse, children, Parents, Brothers and sisters of the Employee who are wholly
and mainly dependent on Employees income.
The Employee shall have to submit a certificate in the prescribed form [ Form No 10-I ] from a
neurologist, an oncologist, a urologist, a hematologist, an immunologist or such other specialist,
as may be prescribed, working in a Government Hospital.
Deduction available is
Rs 40000/- or actual expenditure whichever is lower

Rs 60000/- or actual expenditure whichever is lower [ in case of Senior Citizens ]

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Section 80 E:

Employee should have taken a loan from a Bank, Financial Institution [ Banking Company
or notified Financial Institution], Approved charitable Institution.
Employee should have taken the loan for the purpose of pursuing higher education.
Full Time Studies for any graduate or post graduate course in engineering,
medicine, management or post-graduate course in applied sciences or pure
sciences including mathematics and statistics.
Should have taken loan for purpose of pursuing his/her own higher education (from
the Financial Year 07-08, for the purpose of higher education of spouse and child
also is covered).
Only the Interest paid during the previous year is covered for this deduction.
The Deduction on Interest paid is available for First Eight Years from the First Year of
paying Interest or until the above interest is paid which ever is earlier.
From the Financial Year 05-06 onwards no deduction will be available under section 80E in
respect of repayment of principal amount.

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Section 80 U:
The employee may be a citizen of India or Foreign country.
The Employee should be a resident of India (ordinary / not ordinary resident) for the relevant
Financial Year.
The Taxpayer suffers 40% or more disability of any of the following:

Blindness
Low Vision
Leprosy-Cured
Hearing Impairment
Locomotor Disability
Mental Retardation
Mental illness

Where the condition of disability requires reassessment, a fresh certificate from the medical
authority shall have to be obtained after the expiry of the period mentioned on the original
certificate in order to continue to claim the deduction.

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Medical Authority for this purpose means any hospital/institution specified by the appropriate
Government for the purpose of the persons with disabilities.
Deduction available is
Rs 50000/- for Partial Disability ( 40% Disability )
Rs 100000/- for Severe Disability ( 80% Disability )

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Interest on housing loan:

SELF OCCUPIED PROPERTY INTEREST

The Employee will get exemption towards interest paid on House Property.

If the Capital is borrowed before 01/04/1999 Exemption will be given up to tune of Rs

30,000/- towards interest on House Property.

If the Capital is borrowed on or after 01/01/1999 Exemption will be given up to the tune
of Rs 150000/- towards interest on House Property.]

HOW THE RENTAL PROPERTY INCOME/LOSS BEING COMPUTED

A) Gross Annual Value

**************

B) Less: Municipal Tax

**************
------------A- B
--------------

C) Net Annual Value (A B)

D) Less: 30% Statutory Deduction

Interest on House Property
Vacancy Allowance
Unrealised Rent

******
******
******
******
**************

D) Income / Loss on House Property (C D)

**************

Note:
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Interest on borrowed capital is allowable as deduction if capital is borrowed for the

purpose of purchase, construction, repair, renewal or reconstruction of house property.
No deduction is available for brokerage/commission for arranging the loan.
Interest on fresh loan taken to repay the original loan raised for the aforesaid purpose is
allowable as deduction.
Interest on borrowing can be claimed as deduction only by the person who has acquired or
contracted the property with borrowed fund.
Interest on borrowed capital is deductible fully without any maximum ceiling (in case of a
let out property}. But subject to computation of Income/Loss from House Property as per
12C.
Interest of pre-contruction period is deductible in five equal installments from the year
the property is completed.

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