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IT Declaration for Employees – Deducting TDS from Salaries

Income from employment is taxable under the head 'Salaries' under the Income Tax Act,1961. The Act also provides the benefit of exemptions and deductions, which reduce tax liability. Employees will have to inform their employers all necessary relevant details to benefit from exemptions and deductions, thereby lowering taxes from their salary (TDS).

The following details or documents will have to be provided:

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Rental details

If you are in receipt of House Rent Allowance (HRA) as a component of your salary, you have to provide the following details to avail HRA exemption under section 10(13A) of the Income Tax Act, 1961.

· Monthly rentals to be paid

· Period of the tenancy (in months) for the current financial year

· Address of the rented accommodation

· Where the rent is in excess of Rs.1,00,000, the Permanent Account Number(PAN) of the Landlord

· Rental vouchers or other proof of rentals paid (at year-end declarations)



Details of Home loan

Suppose you have availed residential or home loans in connection with the acquisition (purchase) or construction of a house meant for self-occupation. In that case, you have to provide the following details to to avail deduction in respect of Loss from House Property under section 24(b) of the Income Tax Act, 1961.

  • Purpose of the loan
  • Amount of loan borrowed
  • Date of loan
  • Name of the lender

· Permanent Account Number (PAN) of the lender

· Date of completion of construction of the house

· Break up of principal and interest paid during the year

· Statement of loan and payment proofs (at year-end declarations)



Children's Education

If you are paying fee regarding your children's education, provide the following details to avail deduction in the relation of Children Education Allowance under section 10(14)(ii) of the Income Tax Act, 1961.

  • Number of children
  • Fee paid

· Payment proofs in the form of receipts or vouchers from the institution (at year-end declarations)



Children Hostel allowance

If the children mentioned above are undergoing education in a hostel, provide the following details to avail deduction in respect of children Hostel Allowance under section 10(14)(ii) of the Income Tax Act, 1961.

  • Number of children
  • Fee paid

· Payment proofs in the form of receipts or vouchers from the institution (at year-end declarations)



Car expenditure

Suppose you own a motor car which is used partly for official and partly for personal purposes, and your employer reimburses expenses for the running & maintenance of the car. In such cases, provide the following details to deduce such expenditure as per Sub-rule (2) of Rule 3 of the Income Tax Rules.

  • The engine capacity of the car
  • Proof of expenses incurred in respect of (at year-end declarations)
  • Fuel
  • Servicing
  • Overhauling and maintenance


Handicap benefit

If you are blind/deaf and dumb/ orthopedically handicapped employee and in receipt of transport allowance from your employer, provide the following details to avail deduction in respect of such allowance received under section 10(14)(ii) of the Income Tax Act, 1961.

  • Certificate of Disability approved from a Neurologist having a degree of Doctor of Medicine (MD) or a Civil Surgeon or Chief Medical Officer in a Government hospital
  • The certificate should mention the nature and degree of disability




80C Investments

If you have invested monies into purposes or instruments mentioned under section 80C of the Income Tax Act, 1961, provide the following details to avail deduction.

Wherever applicable- Amounts paid, policy numbers, names, date(s) of investments, policy maturity details etc for investments into:

  • Public Provident Fund (PPF)
  • National Savings Certificate (NSC)
  • Life Insurance premium payment
  • Children's Tuition Fee (Full-time education of any two children)
  • 'Principal' repayment of home loan
  • Investment in Sukanya Samridhi Account
  • National Savings Certificate (NSC)
  • Unit Linked Insurance Plans (ULIPS)
  • Equity Linked Savings Scheme (ELSS)
  • Sum paid to purchase Deferred Annuity
  • Five-year deposit scheme (Post Office)
  • Term Deposit in a Scheduled Bank (5 Years or more)
  • senior citizen’s savings scheme
  • Subscription to notified securities/notified deposits scheme
  • Contribution to notified Annuity Plan of LIC
  • Contribution to Pension Fund of LIC or other Insurance company
  • Employee's contribution to a Notified Pension Scheme (National Pension Scheme; Atal Pension Yojana)

Payment proofs in the form of receipts, vouchers or acknowledgements from the funds, schemes or institutions (at year-end declarations)



Mediclaim policy

If you have paid Medical Insurance premiums, provide the following details to avail deduction in respect of it under section 80D of the Income Tax Act, 1961.

· Names of self, spouse, parents, dependent children in respect of whom premiums are paid

· Age of self, spouse, parents, dependent children in respect of whom premiums are paid

  • Policy number

· Date of commencement and expiry of Risk

· Name and details of Insurer

· Payment proofs in the form of premium receipts (at year-end declarations)



Handicapped Dependent

If you spend for the medical treatment of a Handicapped Dependent or pay towards Specified Schemes for maintenance of Handicapped Dependent, provide the following details to avail deduction in respect of it under section 80DD of the Income Tax Act, 1961.

· Name of Handicapped Dependent

· Certificate of Disability approved from a Neurologist having a degree of Doctor of Medicine (MD) in Neurology (in case of children, a Pediatric Neurologist having an equivalent degree); or a Civil Surgeon or Chief Medical Officer in a Government hospital

· Details of approved schemes invested in

· Payment proofs in the form of medical bills and premium receipts (at year-end declarations)



Interest on Education loan

If you are paying interest on loans borrowed for Higher Education, provide the following details to avail deduction in respect of Education loan under section 80E of the Income Tax Act, 1961.

· Name and details of self, spouse, children, any student for whom the employee is a legal guardian, in respect of whom the loan is availed

  • Date of loan

· Name and details of financial institution

· Break up of principal and interest paid during the year

· Statement of loan and payment proofs (at year-end declarations)



E-vehicle loan

If you are paying interest on loans borrowed for electric vehicles' purchase, provide the following details to avail deduction in respect of it under section 80EEB of the Income Tax Act, 1961.

· Date of purchase of the electric vehicle

  • Date of loan

· Name and details of financial institution lending the loan

· Statement of loan and payment proofs (at year-end declarations)



Savings Bank Interest

If you have received interest from Savings Bank account above Rs. 10,000 during the year, provide the following details.

  • Details of bank account

· Amount of interest received

· Permanent Account Number(PAN)



80U Disability deduction

If you qualify to avail disability benefits mentioned under section 80U of the Income Tax Act, 1961, provide the following details.

· Certificate of Disability approved from a Neurologist having a degree of Doctor of Medicine (MD) in Neurology or a Civil Surgeon or Chief Medical Officer in a Government hospital

· The certificate should mention the nature and degree of disability



Others

The Income-tax law provides a plethora of deductions and exemptions. We have only considered a few of them considering the widespread usage. If you receive additional allowances, invest in schemes/funds, or spend money on specific expenditures not mentioned above, provide the necessary relevant details to the employer to benefit from income tax.