Payroll Year-End

Proof Options Document For Payroll Year End 2005 - 2006

Options for Accepting Proofs wrt Section 10 Exemptions:

Exemptions Options Remarks

HRA – Rent Proof of occupation of the rented house for the Receipts should contain the following:
Receipts period when the house is occupied (Rule 2A read • Should be signed by the house owner on a revenue stamp
with Section 10(13A)). If rent amount exceeds Rs.5000/- , revenue stamp should be
affixed otherwise the rent receipt will be an invalid document.
1. Month on month receipt to be submitted • Should specify the amount of rent paid
2. Consolidated receipt won’t be accepted • Should specify the name of the person who paid rent
• Should specify the address of the premises (city name is
compulsory) for which rent is paid.
• Should specify the month for which rent is paid.
• Should be dated
• Should contain the name and address of the house owner.
• Original receipt should be submitted. Xerox copy of the receipt
is not allowed.
Children 1. Bonafide certificate for Children Education • Restricted to two children only.
Education/Ho Allowance
stel 2. Actual Payment proof for Hostel Receipt
 Options for Accepting Proofs wrt Chapter VIA Deductions:

80D (Medical 1. Current years receipt issued by the Insurance

Insurance) company • Policy should be in the name of the
associate but coverage can be for Self,
Spouse, Children and dependent parents. –
Exemption allowed up to Rs.10,000/-.
. • If the amount invested exclusively on
the eligible senior citizen dependent’s the
additional Rs.5,000/- (i. e. up to tune of
Rs.15,000) will be reduced from the income.

80DD The permanent physical disability or mental retardation of  Only amount invested in the specific
the dependent relative has to be certified by a physician, scheme for the benefit of disabled persons is
surgeon, oculist or practitioners working in a govt. hospital allowed. Total Disability – Rs. 75,000/-
amount paid to LIC/UTI for the policy. Partial Disability Rs. 50,000/-
80 E 1. Current dated Letter from the Bank/Financial • (Higher education such as engineering/
(Education Institution that the loan is being repaid medical etc and full time course and availed
Loan from FI / Bank Available only for the first seven
repayment) 2. Letter issued by the Bank/Financial Institution for years of repayment). Interest on Education
repayment schedule loan is allowed.

• The certificate should contain the

following
♦ Should be on the letterhead of the
Bank from which the loan is obtained.
♦ Should contain the course for which the
loan was sanctioned.
♦ Should contain the interest amount
repaid by the associate during the financial
year starting from 01.04.2005.
♦ Should contain the date on which loan
was sanctioned by the bank.

80 U The required certificate should be from Oculist or a • This benefit is allowed for self only.
Permanent physician or a surgeon or a psychiatrist, as the case
Physical may be, working in a Government Hospital.
Disability
(Self)

Exemption under Sec 80 C and Sec 80 CCC

Exemptions Options Remarks

80CCC 1. Current Years Receipt • Policy from LIC or any approved company by IRDA.
2. Max amount allowed is Rs.10,000/- • Receipt should contain the seal of JEEVAN SURAKSHA or
Pension Scheme.
• Policy should be in the name of the associate only.
• For the same policy, individual premium payment receipts
should be submitted.

Investment Options Remarks

LIC 1. Supported by receipts / Proof of investments for • Policy should be in the name of the associate, spouse or
every single payment minor children. Policies in the name of Dependent parents are not
allowed to avail the benefit. . In case of spouse or Minor Child, the
2. One representative receipt of one period of relationship should be mentioned on the Xerox copy of the
payment. investment proof.
• If policy is in the name of the spouse, a declaration need
3. If amount invested in Dependents Name, the to be obtained from the spouse stating that they are not
relation ship and the Declaration in the stated claiming rebate for these premiums paid in their income tax
manner is very much essential. returns.

PPF 1. Supported by receipts / Proof of investments • If Xerox copy of the PPF pass book has
been submitted as proof for payment, the
2. Updated Pass book Xerox copy should contain from the cover of
or the PPF pass book (where name of the
3. Stamped Challan account holder, name of the bank and the
account number has been mentioned) till the
current year’s investment. Otherwise, the
same will be given for any tax benefit.
• Challans or PPF passbook copies in
which name of the depositor is not mentioned,
it will not be considered for rebate.
• PPF investment should be made in the
name of the individual, spouse or Minor Child.
In case of spouse or Minor Child, the
relationship should be mentioned on the Xerox
copy of the investment proof.
• If investment is in the name of the
 spouse, a declaration need to be obtained
from the spouse stating that they are not
claiming rebate for these premiums paid in
their income tax returns.
ULIP 1. Supported by receipts / Proof of investments

2. Original receipt

3. Counter foils of bank remittance

Mutual Funds 1. Supported by receipts / Proof of investments

2. Actual certificate

3. Counter foils of bank remittance

Repayment of 1. For repayment of housing loan, the certificate
housing loan / from housing finance company / bank is to be submitted.
stamp duty for 2. For stamp duty, Xerox copy of the registered
purchase of house document should be submitted.
Infrastructure 1. Supported by receipts / Proof of investments • Agent’s receipt will be not considered
Bonds or as proof investment.
2. Xerox copy of the Actual certificate • Name of the investor should be
specified in the investment.
3. Counter foils of bank remittance • Investment should be in the name of
the associate only.
NSC 1. Supported by receipts / Proof of investments • NSC Certificate should be in the name
or of the associate only.
2. Actual Certificate
NSC interest 1.Xerox copy of the NSC certificates made during the • NSC Certificate should be in the name
previous year should be submitted. of the associate only.

School tuition Supported by receipts issued by the school, college,

fees university or educational institution. Fees only allowed.

Options for Accepting Proofs of Other Income/Loss

Income/Loss Options Remarks
Other income Declarations should be annexed with along • Other income Declaration is mandatory to claim other income
Loss on House with certificate from the housing finance company / Bank as well House property loss benefits
Property • Construction of the house should have been completed during
 the financial year, otherwise the deduction is not allowed under this
head.
• Separate calculation sheet should be attached for different
house.
• For self-occupied property, only interest is allowed as
deduction while calculating loss on house property.
• For let-out property, sufficient proof should be attached along
with the computation statement.
• The certificate from the Housing finance company / Bank
should contain the following.
♦ Should contain the year on which the loan has been taken.
♦ Should contain the name of the assessee & address of the
property against which the loan has been given.
♦ Should contain break up of principal and interest repaid /
repayable during the financial year.
♦ House Property’s Addressed should be mentioned in the
Annexure.
♦ Date of completion of the House as well as occupancy should
be mentioned in the Annexure
♦ Completion certificate and Occupancy certificate from the
builder is must.

Previous Employment

If an employee joins after 1.4.2004:

• Section 192(2) gives the option to the employee to disclose or not to disclose income from previous employment

Therefore the steps are as follows:

• If the employee has declared his previous employers income then Polaris has to consider the income to compute tax liability
for the remaining months:

• In such a case Form 12 B supported by tax computation sheet of the previous employment is compulsory and Form 16 of the
previous employment.
• If Form 16 is not produced and previous employment income is only supported by a tax computation from the previous
employer and Form 12 B then all the relief / exemptions and deductions from the previous income need to be supported by
proofs.
 Claiming both House Property Loss as well as rent al Exemption

• If the rental as well as House property were situated in different places (different cities) and there is no
income derived from the House property, the assessee is eligible to claim both benefits by declaring let-out
property income as nil in the Other income Annexure.

Associates are not eligible to claim House rent as well as Self-Occupied property loss.