What is Income Tax Declaration and IT declaration process explained

What is Income Tax Declaration and Why is It Required?

Every year, as the financial calendar moves toward March, employees across India start receiving emails from their HR departments regarding the income tax declaration. If you are a salaried professional, understanding this process is vital to ensuring your take-home salary isn’t hit by heavy tax deductions.

At Best Tax Consultants In Pune – Startup Portal, we believe in empowering taxpayers with the right knowledge. Led by experts Govind S. Jethani and Nikhil Rajarshi, we provide end-to-end tax solutions to help you navigate the complex world of taxation documents and compliance.

What is Income Tax Declaration?

An income tax declaration is a formal statement made by an employee to their employer at the beginning or during the financial year. In this declaration of income tax, the employee provides details of their planned investments and expenses that are eligible for tax deductions under the Income Tax Act.

Meaning of IT Declaration in Income Tax

In simple terms, it declaration is your way of telling your employer: “I plan to save money through these specific schemes, so please do not deduct full tax from my monthly salary.” Based on this income tax statement, the employer calculates the estimated taxable income and deducts TDS declaration (Tax Deducted at Source) accordingly.

What is Income Tax Declaration Form?

The income tax declaration form is the document used by employees to list their tax-saving investments. This tax declaration form acts as a provisional record.

While the it declaration form is submitted at the start of the year (April/May) as an estimate, you are required to submit actual proofs of these investments towards the end of the financial year (usually January or February).

What is Form 12BB? (Meaning & Purpose)

If you are wondering form 12bb means, it is the standard investment declaration form prescribed by the Income Tax Department.

Form 12BB meaning: It is a statement of claims by an employee for seeking tax deductions.
Purpose: It helps the employer accurately estimate the tds declaration to be deducted from your salary. It covers House Rent Allowance (HRA), Leave Travel Concession (LTC), Interest on Home Loans, and deductions under Chapter VI-A.

Who Needs to Submit Income Tax Declaration?

Any salaried individual whose annual income exceeds the basic exemption limit (₹2.5 lakh or ₹3 lakh depending on the tax regime) needs to submit a tax declaration.

New Employees: Must submit the it declaration at the time of joining.
Existing Employees: Must submit it at the start of every financial year.
Investors: Those planning to claim deductions under Section 80C, 80D, etc., must file an investment declaration.

Investment Declaration in Income Tax

The investment declaration is the core of your tax-saving strategy. It allows you to reduce your taxable income by investing in government-approved schemes. Common investments included in the invest declaration form are:

Section 80C: Life Insurance Premium, PPF, ELSS funds, Children’s Tuition Fees, and EPF.
Section 80D: Medical insurance premiums for self and parents.
Section 24: Interest paid on a home loan.
HRA: Rent paid to the landlord (requires PAN of the landlord if rent exceeds ₹1 lakh).

Income Tax Declaration Format Explained

The it declaration format or tax declaration format is usually provided by your company’s payroll portal. However, a standard income tax declaration format includes:

Personal Details: Name, Address, and PAN.
House Rent Allowance (HRA): Details of rent paid and landlord info.
Deductions under Chapter VI-A: Breakdown of 80C, 80D, 80E, etc.
Interest on House Property: Details of home loan interest.
Verification: A signed statement confirming the information is true.

Whether you call it a tax form declaration or an income tax statement, the structure remains consistent across most organizations.

Estimated Income for Which This Declaration is Made

The term estimated income for which this declaration is made refers to your projected total earnings for the entire financial year (April 1 to March 31).

Since you file the declaration of tax at the start of the year, the employer uses your current salary structure and multiplies it by 12 months, adding any projected bonuses. Your income declaration helps balance this estimate against your planned savings, ensuring your monthly “in-hand” salary remains stable.

Documents Required for Tax Declaration

While you only need to fill out the it declaration form initially, you must eventually provide the following taxation documents as proof:

Rent Receipts: To claim HRA.
Insurance Premium Receipts: For Life or Health Insurance.
Home Loan Interest Certificate: Issued by your bank.
Deposit Slips: For PPF, NSC, or ELSS statements.
Tuition Fee Receipts: For school/college fees of children.
Donation Receipts: For deductions under Section 80G.

Failure to provide these documents later will result in the employer deducting the “saved” tax in a lump sum from your March salary.

Benefits of Filing Income Tax Declaration

Filing your declaration of income tax form correctly offers several advantages:

Higher Take-Home Salary: By declaring investments, your employer deducts less TDS each month.
Better Financial Planning: It forces you to plan your investment declaration early in the year rather than rushing in March.
Avoid Refund Hassles: If you don’t declare and your employer over-deducts TDS, you have to wait months for a refund from the IT department after filing your return.
Accuracy: Reduces the chances of errors in your final income tax statements.

How to Submit Your IT Declaration: A Step-by-Step Guide

Select Tax Regime: Choose between the Old Tax Regime (to claim deductions) or the New Tax Regime.
Fill the Form: Enter amounts in the tax declaration format for each section (80C, 80D, etc.).
Upload Form 12BB: If required by your employer, download, sign, and upload the form 12bb.
Submit: Keep a copy of your income tax declaration for your personal records.

Conclusion: File Your Income Tax Declaration Correctly & On Time

Understanding the i t d full form (Income Tax Declaration) and its implications is the first step toward smart wealth management. A timely declaration of income tax ensures you aren’t financially strained at the end of the year. At Startup Portal, we specialize in helping individuals and businesses manage their tax declaration and compliance. Whether you need help understanding form 12bb means or require assistance with comprehensive tax planning, our experts Govind S. Jethani and Nikhil Rajarshi are here to guide you.

Don’t let taxes catch you off guard. Ensure your income tax declaration form is submitted accurately to maximize your savings. Would you like Startup Portal to help you plan your tax-saving investments for this year? Contact us today for a consultation!