What Is EFQM IT Declaration & Why It Matters

What Is EFQM IT Declaration & Why It Matters

5-6 minutes

IT Declaration Definition

Income Tax Declaration is a formal statement submitted by an employee briefly confirming his or her total income, expenses, and proof of investments done in tax-saving devices such as insurance, provident fund, annuity schemes, etc. The process of tax in India starts after the income declaration and finishes after filing the ITR.

Every employer requires a tax declaration form to be filled up by employees at the commencement of a financial year. It is a summarization of all tax-saving investments an employee commits to making in that particular year.

The employee has to provide the vouchers of expenditure or investments made during the year which justify his declaration. In the event of failure to do so, the employer shall recover the shortfall in tax deducted at source from the salary of the employee in the remaining months.

Employers who have traditionally managed payroll using spreadsheets collect proofs of investment through physical copies and emails. Then, the concerned teams verify the details and approve the tax declarations. The whole process becomes cumbersome and confusing.

An Income Tax Declaration in India consists of an individual filling up an elaborate report of the earnings, spending, and investment made, among other financial matters, to the government. This is based on your earnings, for example, your salary, business profits, rental income, etc.

The main goal of a tax return is to calculate and report the exact sum of income tax that a taxpayer or firm must pay to the state.

In general, one should be done at the onset of the financial year. Furthermore, in order to make any sort of claim, an employee should substantiate their expenditures or investments.

What is Form 12BB?

Form 12BB is used for computing the amount of tax to be deducted at source, more commonly known as TDS. The form was introduced through Section 192 of the Income-tax Act, 1961. In essence, it is the income tax declaration form applicable to salaried personnel who have to pay their income tax to the Government of India.

Form 12BB is a form that employees use to declare to their employer investments and other expenses that can be considered for tax deductions. It is the form that would be used to document a specific employee''s claims, which are to be paid under their tax declaration.

Procedure for Filing Your Tax Declaration on Total Income

Use the recently launched site of the Income Tax, which provides various services to make filling taxes easier. Below is the step-by-step approach it helps in declaring the income tax files.

1. Search for the Income Tax Forms section and download the form for Income Tax Declaration 12BB.
2. When the download has completed, enter any personal information. This might be personal, for example, name, address, date of birth, sex, or any such similar information.
3. When adequate personal information has been entered, be sure to enter information on the tax declaration—information regarding loans associated with housing, rental details, life insurance policy premium payment details, if any, personal investment details, and financial information of similar nature.
4. After that, just properly check the document for all the details, sign it on the date, and you may take it to your office.

Some of the Most Common Investments and Expenses

• House Rent Allowances (HRA): You can claim the deduction of tax to the extent of the rent paid to the landlord from Form 12BB for claiming them. However, to make a claim, the following information shall have to be provided in respect of the landlord:
  • Name
  • PAN
  • Address for declaration
• LTC (Leave Travel Concession): The Leave Travel Concessions are normally provided to employees by their employers for traveling purposes within the country. The Leave Travel Concession can be claimed by an employee only in case it is part of his or her remuneration package as provided by the company.
• Home Loans: To declare the interest on the home loan, a person must simply fill out basic details like your name and PAN number. In addition, they must also include the provisional interest certificate. This is issued by the bank.
• Life Insurance Premiums: Also, the premium value of their insurance policies must be clearly elucidated. The premium amount that an individual pays on his life insurance policies is allowed as a deduction while computing his taxable income under Section 80C of the Income Tax Act. You, the policyholder, are entitled to get the amount.

There you go! That''s all that you should know about the IT declaration. I hope you have understood it now completely and will have a great time solving any queries that staff may have.

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