Today we will discuss on the declaration to be submitted by the employee. what are the documents need to be submitted and why to submit the documents.
Why Declaration to be submitted by the salary employee?
TO save the TDS employee need to submit the documents. Every company will deduct the TDS of the employee based on his net income. For submitting the correct TDS employer needs the details from the employee.
When to submit the declaration and documents?
Employee need to give the declaration on the start of the year and submit the documents in the last quarter of the year.
Income Declaration of Employee
Employee has to give the income details to the employer for correct deduction of the TDS. This declaration should be in the form 12C as per rule 26B and it should contain
Employee Name, PAN Card Number, residential status
Any other income
Income from business – You have done any business in your name.
Income from capital gain – Like sale of share, Property, Gold etc
Other source – Interest income earned on investment.
TDS/Advance tax /Self assessment tax
Submit the TDS/Advance tax /Self assessment tax Challan if you paid.
If income details not submitted by the Employee
If an employee does not want to submit the income details or not submitted the details on time he should calculate the tax on by clubbing salary and other income and pay the self assessment tax in yearend or if applicable advance tax in between the year.
Click here to view How to calculate Advance tax
Expenses Declaration –
An employee can submit the expense declaration to save the tax. Like in business we can claim all the expense Petrol, Telephone, rent etc. In salary we can claim only some allowable deduction.
Interest paid in house property
An employee needs to submit the home loan statement of them to the employer with the bifurcation of interest and principal component. As he will get the interest expenses in house property and principal component in deduction under section 80C
Extent of benefits in income tax –
|Self occupied property||Up to Rs 2,00,000|
|Let out property||No limit|
Rent paid for House property
If you are leaving on let-out house, submit the rental receipt of the house to the employer. After submitting the receipt you will get the House rent allowance in income tax.
Extent of benefits in income tax –
Least of the following is allowed in income tax –
Actual Rent allowance given by the employer
Rent – 10% of salary
50% of the basic salary in metro and 40% of basic salary in other state
Children education and Hostel expenses –
Children education allowance is available Up to Rs 100 per month for maximum 2 children and hostel allowance is Up to Rs 300 per month for maximum 2 children.
Submit the medical bills to the employee. Medical reimbursement by the employer to the employee is allowed up to Rs 15,000.
All About Medical reimbursement /Medical allowance and Medical insurance policy
Medical allowance –
Medical allowance is simply given by the employer to the employee as a part of salary component. No tax benefits is available to the employee in medical allowance
Medical allowance –
It is reimbursement of expenses given by the employer to the employee on the basis of medical bills. It is exempt in income tax upto Rs 15,000.
It is advisable to tell the employer to give us medical reimbursement and not an medical allowance in a part of salary.
Medical insurance is available under section 80D. Medical insurance is available whether you have taken the Medical allowance/ Medical allowance or not.
Leave travel allowance
Leave travel allowance is allowed for the actual transport cost incurred by the employee. Employee can submit the traveling expenditure to claim the LTA.
Click here to know all about LTA.
Claim the following expenses without submitting the documents –
An employee can claim the transport allowance of Up to Rs 1600 per month. Transport allowance is expense to reach from the home to office.
Click here to know some more allowance on specific condition –
Investment Declaration –
Submit all the investment declaration in a company like
Deduction available in section 80C –
Investment in a LIC – It is available on payment basis available only if you have paid any tax saving LIC in the year.
Public provident fund
Bank fixed deposits (the 5 yr or more)
National Savings Certificate (NSC)
Equity Linked Saving Scheme
Tuition/School fees of your children
Equity linked savings scheme
Extent of deduction –
50,000 is maximum allowable deduction.
Medical insurance premium – It is available for the father, mother, spouse etc.
Extent of deduction
|For himself, spouse and children||Rs 15,000|
|For parents (dependent or not)||Rs 15,000|
If senior citizen limit will be 20,000
Summery of the above
Submit the following declaration and documents to the company
|Income tax benefits||Documents|
|Interest paid in house property||EMI structure certificate from the banks|
|Rent paid for House property||Rent Receipts|
|Children education and Hostel expenses||Receipts|
|Medical Reimbursement||Medical bills|
|Leave travel allowance||Travelling bills|
|Investment||Receipt of the same|
Tax baniya Views on the above –
It is advisable to appoint a private tax consultant and get his advisory to save the tax. and take his advise what are the documents to be submit or what we can claimed directly in the income tax return.