As income tax filings continue and the deadline for filing a belated return is quickly approaching, taxpayers are grappling with questions about how deduction claims not reported to the employer are treated.
Reporting deduction claims to the employer refers to the process by which salaried employees declare eligible tax-saving investments and expenses during the financial year, allowing the employer to factor these into the calculation of tax deducted at source (TDS) on salary.
The last date for filing the income tax return was extended twice, with the final deadline falling on 16 September. The window for filing a belated return, however, remains open until 31 December. During this period, taxpayers may seek to correct or revise their ITR, including missed income or deduction claims, such as a wrong TDS claim or underreporting of income.
Can deductions still be claimed at the ITR filing stage?
As per the Income Tax Act, deductions which have not been declared to an employer during the year of account can still be claimed while filing the ITR.
“The tax deducted by the employer is only a provisional calculation based on the information available at that time. The ITR filing is the final and legally valid tax computation where eligible deductions can be claimed,” said Siddharth Maurya, the founder and Managing Director of Vibhavangal Anukulakara.
What happens if deductions weren’t declared earlier?
If deductions were not declared to the employer during the year, they are not automatically lost.
Any deduction to which an assesse is legally entitled can be claimed through the income tax return. “As long as deductions are claimed in the Return of Income, there should not be any challenge. Non-disclosure to the employer is not relevant,” said Ketan Vajani, the former president of Chamber of Tax Consultants.
However, taxpayers may have paid more tax through TDS during the year if the deductions were not declared to the employer. Once these deductions are properly claimed in the ITR, the excess tax paid is adjusted, and any leftover amount is returned by the Income Tax Department after the return is processed, Maurya noted.
Which deductions can be claimed while filing ITR?
Among taxpayers, most of the deductions under Chapter VI, A can be claimed at the time of return filing.
Examples of such deductions are those under section 80C for investment, 80D for health insurance premium, 80E for education loan interest, 80G for eligible donations, and 80CCD(1B) for additional NPS contributions. However, it is important that such claims be in agreement with the selected tax regime, Maurya said.
On the other hand, certain deductions are admissible only when the return is filed within the due date, said Vajani.
He explained this mandate with an example, noting that certain deductions, under Chapter VI-A – Part C, which covers profit-linked deductions are available if the return is filed within the due date. “For Assessment Year 2025-26, such due date has already gone so these deductions will now be no more available if the return is filed now. All other deductions are possible to be claimed in the return,” he said.
Key things taxpayers should be careful about
According to the tax experts, these are the key things taxpayers are advised to be careful about while filing ITR:
— Taxpayers must maintain proper documentary evidence which may be required at the stage of assessment.
— They should also ensure that the deductions claimed are within the statutory limits prescribed.
— People liable to pay tax should ensure that deductions are only under the correct regime.
— Refrain from duplicate or inflated claims.
— Compulsorily verify the figures with Form 16, AIS and bank statements.
Read all stories by Eshita Gain
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Taxpayers are advised to consult a qualified tax professional or refer to the official website of the Income Tax Department for accurate and up-to-date guidance before filing their returns.
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