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If company deducts TDS, it has to issue withholding tax certificate to employee

The details of TDS deposited to your credit should also reflect in your Form 26AS (which can be downloaded from your income tax portal) as and when the TDS return is filed by the deductor

I plan to increase the principal repayment for my housing loan. Will the increased principal amount be eligible for tax deduction under Section 80C of the Income-tax Act, 1961? Will there be a difference in tax if I increase the principal in my equated monthly instalments (EMIs) or pay it as a lump sum?

—Ritu Sharan

With respect to the principal repayment, deduction under Section 80C from gross total income is available towards the amount paid or deposited in the relevant financial year (FY), towards the purchase or construction of a residential house property, subject to other prescribed conditions and the overall deduction limit of 1.5 lakh.

Accordingly, if you choose to increase the principal repayment amount, the same would be eligible for deduction under Section 80C up to 1.5 lakh. Further, whether the increased principal repayment is made via EMIs or as a lump sum payment, there will be no impact on the eligibility of deduction under Section 80C.

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I work as a consultant for two-three employers. All of them cut tax deducted at source (TDS) before they make any payment to me. When I pay my advance tax, as per schedule, should I assume that the TDS would already be paid to the tax department by these companies? How will it work?

—Deepak M.

If your total tax liability net of TDS on the estimated income, is likely to be 10,000 or more during the relevant financial year (FY), you are required to pay such tax by way of prescribed advance tax instalments during the FY itself.

Generally, where tax is deducted at source, the deductor is required to issue you a withholding tax certificate (Form 16/Form 16A depending upon the nature of your income), as per the prescribed timelines. This contains the details of the gross income paid or payable to you, and taxes deducted and deposited thereon (with the challan deposit details).

The details of TDS deposited to your credit should also reflect in your Form 26AS (which can be downloaded from your income tax portal) as and when the TDS return is filed by the deductor. Therefore, it is advisable to check these documents to verify from time to time—TDS deducted and deposited to your credit.

In case the said documents are not available or updated at the time of advance tax estimations, you may proceed with the advance tax estimates basis the presumption that TDS would have been deposited by the deductor. However, you should reconcile the same with the documents and Form 26AS, prior to filing the tax return and any discrepancies may be highlighted to the deductor.

Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India. Queries and views at mintmoney@livemint.com

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