What is an Income Tax Declaration?
An income tax declaration is a document an employee submits to their employer. The document contains information about the employee's total income and expenses. It also requires the employee to provide proof of investments in schemes such as PPF, life insurance, annuity plans, details for claiming exemption of allowances such as LTA, HRA, and interest paid on home or education loans etc.
An income Tax Declaration is essential to calculate the correct TDS amount based on the employee's taxable income.
By giving this information to the employer, the employee can claim tax benefits and reduce the tax burden. The income tax declaration for salaried employees should be given to the employer that deducts TDS at the end of the financial year, in January or February, or as per the employer's requirement.