Income tax declaration is a form that an individual must fill in to declare their income and taxes paid during the year. This form aims to ensure you have paid the correct amount of tax based on your income that contains the employee’s gross income, tax-saving investments into instruments such as insurance, provident fund (PF), annuity plans, and EEE amount paid to the employee.
According to the Income Tax Act, an employer needs to deduct tax on an employee’s salary every month. The Central Government has announced a new income tax regime with lower tax slabs in the Union Budget of 2020. Under this system, taxpayers can choose their preferential tax bracket based on their income. Before selecting a particular tax bracket, employees can choose which regime works best for them by making proper tax declarations and calculating their tax liabilities.