Payroll

Employer's Guide to
Processing POI
Learn when & how to process proof of
investments with ease using Zoho Payroll.
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?
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.

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Enabling Proof of Investments
submission in Zoho Payroll
You can enable Proof of Investments submission by following the
below steps:

Go to Settings > Preferences.

Go to the IT Declaration & POI Submission tab.

Enable the Proof of Investments submission option.

Select the date on which the POI submission should be locked.

Select the month from which the payroll should be processed

with the approved amount.

Note: Income tax will be processed based on the investment

amounts from the selected POI processing month.

Click Save.

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

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

Apart from this, you can selectively enable Proof of Investment

for employees.

Go to the Employees module.

Select the employees for whom you want to enable proof submission.

Click More.

Select Release Proof of Investments.

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

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.

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Submitting proofs on behalf of the employees

You can submit the proof of investments on behalf of your employ-

ees. To do this,

Navigate to the Employees module from the left sidebar.

Select the employee for whom you want to submit the

proof of investments.

Navigate to the Investments tab.

Under the Investments tab, move to the Proof of Investments section.

Click Submit Proofs.

Enter the actual amount invested in each investment that

the employee had declared.

You can add new investments, if needed.

Click Save and Compare.

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

Once you’ve selected the desired regime, click Save.

In the summary page, click the Attach icon to attach the proofs.

Add comments, if needed.

Review all the details and click Submit.

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

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Reviewing and Approving the Proof of Investments

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

Go to Approvals > Proof of Investments.

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 Select the employee for whom you want to review the Proof
of Investments.

Review the investment proofs and enter the actual approved

amount and select Approve.

If there is any discrepancy, select Reject from the drop down menu.
Enter a reason as to why the proof has been rejected.

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.

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

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.

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

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FAQ
What is Proof of Investment?

Towards the end of the financial year, employees are required to submit the
proofs of their actual investments and expenses to corroborate their IT dec-
laration. Employers or approvers will process these proofs and calculate tax
accordingly.

Does Zoho Payroll support computing taxes according

to the New Tax Regime?

Yes, employees can choose between the new and the old tax regimes and
declare investments to compute tax accordingly in Zoho Payroll.

Is there an option to view tax liability before submitting

investment declarations?

Yes, you can view the total tax liable according to both the regimes. Enter
the investment declarations and click Submit and Compare. You will be
redirected to the tax comparison page wherein tax liable under the two
regimes will be displayed.

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Is there an option to view tax liability before submitting
investment declarations?

Yes, you can view the total tax liable according to both the regimes. Enter
the investment declarations and click Submit and Compare. You will be
redirected to the tax comparison page wherein tax liable under the two
regimes will be displayed.

Can I switch between tax regimes in the middle

of the fiscal year?
Yes, you can switch between tax regimes and modify investments as long as

The first payroll for the financial year is completed

IT Declaration submission is not locked

POI is not processed

Can I attach all the proofs at one go?

For a single investment (say, three LIC policies under section 80C), you can
compress all the proofs and upload it at once. However, for multiple
investments, you cannot upload the proofs in a single file.

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Can I collect proofs in multiple phases or can it be
done only once?

You can collect proofs in multiple phases.

You can release the POI collection in a particular month and close it after
two or three weeks, and process it for tax calculation.
The next phase can begin in the following month after you enable POI
submission.

Can the declaration be changed after proof of

investment is submitted?

Yes, the IT declaration can be changed after POI submission, provided the IT
Declaration is unlocked. However, it will not have any effect on the proof of
investment or the income tax calculation once the POI processing month starts.

Note: POI (reviewed or in awaiting approval state) will be considered for

calculation from the start of the POI processing month.

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Should I approve the proof of investments even though
I submit it directly from the admin portal?

Yes, once you submit the investment proofs, you need to either approve or reject
them. To do this,

Go to Approvals > Proof of Investments.

Select the employee for whom you want to review the Proof of Investments.

Review the investment proofs and enter the actual approved amount and
select Approve.

If there is any discrepancy, select Reject from the dropdown menu. Enter a
reason for rejecting the proof.

Once you have reviewed all the proofs, select Consider for IT.

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How do I reject an investment proof?

While reviewing the proof of investments, If there is any discrepancy in the

attached proof, you can reject it. To reject:

Go to Approvals > Proof of Investments.

Select the employee for whom you want to review the proof of investments.

Select the investment proof you want to reject.

Click the dropdown menu next to the Approve option and select Reject.
Enter a reason for rejecting the proof.

Can Income Tax be edited or overridden after POI

is submitted?
No, income tax cannot be overridden once the investment proofs are
processed and approved.

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Can the POI lock be released after the date is barred?

Yes, POI can be enabled each month or after the date is barred.

Go to Settings > Preferences > IT Declaration & POI Submission.

Toggle the IT Declaration and POI Submission button.

Set a deadline for POI submission.

Click Save.

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Can I selectively release the POI lock for certain employees
after the date is barred?

Yes, POI submission can be enabled for employees selectively.

Go to the Employees module.

Select the employees for whom you want to enable proof submission.

Click More.

Select Release Proof of Investments.

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Should I add EPF and VPF details in the Proof of Investment
module and submit proofs separately?

No. Employee Provident Fund (EPF) and Voluntary Provident Fund (VPF) will be
accounted for automatically in the tax calculation. There is no need to submit
proof for this.

Do I have to add the upper limit for investments under each

section while enabling proof of investments submission?

No, Zoho Payroll displays the investment limit for each section in the Proof of
Investments tab.

What is Declared amount, Approved amount and

Actual amount?

The amount specified in the IT Declaration is considered as the Declared amount.

The amount for which the proof is available is the Actual amount.
The amount which is validated by the payroll admin is the Approved amount. The
Approved amount will be considered for tax calculation once the POI processing
month starts.

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