Proof of Investment

What is a Proof of Investment?

Employees can reduce their taxable income by investing in a few investment options provided by the Government. If employees have made such investments, they will declare it in their IT Declaration. At the end of the fiscal year, they will be required to submit proofs for their investments. The organisation will process these proofs of investments, calculate the employees’ tax accordingly and submit the tax levied to the Government.

Pro-tip: It is recommended that employers process the proof of investments in multiple phases starting from December or January. Employers can start considering the investment sums for income tax from the month of January to distribute the tax burden on employees. This will also make processing investment proofs easier, especially when an organization has more than 50 employees.

When is the ideal time to enable the investment proof submission?

Ideally, employees should be allowed to submit their proof of investments from the month of December. This would reduce employers’ workload and make it easier to process the investment proofs before the end of the fiscal year.

Enabling Proof of Investments submission in Zoho Payroll

You can enable Proof of Investments submission by following the below steps:

Note: Income tax will be processed based on the investment amounts from the selected POI processing month.

POI Preference

Once you click Save, the following automated mail will be sent to all the employees who have portal access.

POI Mailer

Note: This is an automated mailer and it cannot be edited.

Apart from this, you can selectively enable Proof of Investment for employees.

Selectively Enable

Employees will now be able to submit their proofs from their portals.

ESS Submit Proof

If the employees do not have access to their portals, employers can submit the proofs on behalf of the employee in the Employees module.

Insight: Pre-tax Deductions (VPF, NSC, etc.) will be considered for tax calculation automatically. No proof is be required for this. 


Submitting proofs on behalf of the employees

You can submit the proof of investments on behalf of your employees. To do this,

Investment Page Attach proofs

You will be redirected to the Tax Comparison page. Here, you can opt for either the new regime or the old regime.

Investment Page

If you want to change the tax regime, you can do so before running the first payroll for the financial year. Select Change Tax Regime and click Save after choosing the desired regime. Once this is done, click Submit.

Note: You can view the tax liability in each tax regime using the Compute Tax option at the bottom of the page.

Investment Page

Reviewing and Approving the Proof of Investments

Once your employees submit the proofs, you need to either approve or reject them. To do this,

Approvals Tab Reject Approval

Once you have reviewed all the proofs, click Consider for IT. The approved amounts will be considered for income tax calculation for that financial year.

Yet to confirm

There is also an option to approve all the proofs in one go by clicking Approve All & Consider for IT in the dropdown menu.

Approve All

Once the investment declarations are made in the Investments module (either in IT Declaration or in POI), the changes have to be applied in the pay runs module in case the pay run is in draft state. Alternatively, the pay run can be deleted and rerun.

Note: Changes made in the investment declaration after the amount is approved will not be taken into account for tax calculation.

View POI FAQ

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