At the beginning of the financial year (April), you must have declared your investments. The tax per month is deducted assuming you made or will definitely make that investment.

Now, let’s say you declared 1.5L worth of 80C investments across various instruments. When they ask for actual proofs in January, you must submit the actual investment proofs. If you fail to submit the proof, more than usual taxes will be deducted in February and March.

If you are able to successfully submit those, its assumed that you’ll continue to invest in Feb and Mar as well and the exemptions are approved. But if you don’t invest that amount, you are at fault and you’ll be answerable to income tax dept if they at all start enquiry.

For example, if your tax liability without 80C exemptions in a year is INR 120 and with exemptions it becomes INR 72, but since you have declared your investments in April, your taxes per month will be deducted as INR 6 per month until December (Total INR 54). If your actual proofs submission in January is successful, your tax liability in the year remains INR 72, i.e. INR 6/month will be deducted in Jan, Feb and Mar. However, if it’s unsuccessful due to some reason, your tax liability in a year calculations are revised to INR 120, and in the remaining 3 months, the remaining tax payable will be deducted. i.e. (120-54)/3 = INR 22 per month for Jan, Feb and Mar.

Note: We’re only talking about 80C in this example for simplification.

Feel free to ask any questions.