Salaried individuals who will be filing the income tax by the end of the ongoing financial year, also need to submit a tax declaration form. Often, new employees get confused regarding what needs to be declared in the tax declaration form. Income Tax Declaration via Form 12BB is a statement of claims that an employee gives for deduction of tax to his or her employer to claim tax benefits or rebates on investments and expenses. Employees need to provide this declaration to their employers in a timely fashion because based on the declarat🍸ion, the employer calculates the tax deducted at source (TDS) on the employee’s salary.
Things To Be Included In Tax Declaration
A salaried person needs to submit a tax declaration form at the beginning of each financial year. The form primarily includes a list of your allowances or deductions that one may claim as an exemption or deduction from the salary depending upon the salary 💜structure.
“Typically, the declaration includes details about an employee and certain salary income elements that may be claimed as exeꦜmpt. These include house rent paid, leave travel assistance, etc, and certain expenditures, investments or payments that may be claimed as a deduction from the gross income,” says Nitin Mohan Kashyap, a chartered accountant associated with Coopers Tax Consulting. Usually, the tax-saving investments and expenses include interest paid on housing loan, premium paid for life insurance policies, premium paid for unit-linked insurance plans (Ulips), Public Provident Fund (PPF), tax-saving bank fixed deposits, National Savings Certificate (NSC), accrued interest on NSCs, equity-linked savings scheme (ELSS), and more, says Kashyap.
Some of the investments and expenses that people may forget to declar🌺e include tuition fees, principal repayment on housing loan, additional deduction in respect of interest on loan taken for residential house property, stamp duty or registration charges, any investment in Sukanya Samriddhi account, and contribution to a pension plan or National Pension System (NPS).
Some medical expenses al🌜so qualify. Medical insurance premium and expenses on medical treatment of a dependent with certain disabilities, are two of these.
If you have an education loan or donated to qualified entities, that tꦏoo can be included.
The Sections of the Income Tax Act, 1961, under which these investments and expenses fall are Sections 80C, 80CCC, 80CCD, 80E, 80G, 80TTA, and others, says Mitesh Nagori, a practising chartered accountant and owner of CA Mitesh and Associates, a financial firm.
Failing to Submit Declaration
“If the employee does not submit their investment declaration form or if they forget to declare something, then the employe🥃r will deduct excess taxes (TDS). In such a scenario, the employee can declare their actual investments in their income tax return and claim a refund for the extra tax deducted,” says Nagori. However, this will mean waiting for the refund in the bank account.
Apart from sharing the details of tax related investments and 💖expenses, you also need to submit proof of these later in the year to support the declaration. “If you fail to do so (i.e., not provide the proof), the employer will have to recover the tax shortfall from the employee’s salary in the remaining months. The due date for submission of proof is organization specific, but normally during the last three months of the financial year,” adds Kahyap.
If you have additional income apart from 🦄the salary, there is no specific requirement to submit proof of that in the tax declaration. However, at the time of filing your tax returns, you need to include these details.
