If you’re one of the millions of salaried employees who contribute to India’s taxation system, you must make proper tax declarations to avoid paying hefty penalties. Read on to learn more about what a tax declaration is, the different types of investment declarations you can make, and how your employer needs to verify your information to ensure correct filing.
A tax declaration is a statement that you make to the government regarding the income you’ve earned in a year. This is used to calculate how much you need to pay in taxes. It also explains your tax deductions and exemptions. You must file a tax declaration before the deadline or face stiff fines and penalties. If you’re unsure about how to file, consult with an experienced attorney who can guide you through the process.
Salaried employees in India are required to submit an investment declaration form (Form 12BB) to their employer, generally towards the end of the financial year, in January or February. The employer then uses this information to calculate the net taxable income of the employee and deduct TDS accordingly.
The declaration forms are usually uploaded to an online portal by the employees themselves or collected manually by payroll and finance departments. To reduce manual efforts, you can use a payroll automation software like RazorpayX Payroll to collect and collate the declaration forms along with the documentary proofs. This helps the payroll team to calculate and deduct TDS in a timely manner. Steuererklärung