A tax declaration is the information that an employee provides to their employer about the expenses & investments they intend to make in the financial year. It is a vital piece of documentation that helps the employer arrive at an appropriate net taxable income and deduct TDS accordingly. Typically, the employer needs to receive this declaration from employees towards the end of January or February. The information shared can also help an employee claim various deductions & influence the final amount of taxes deducted from their salary.
A common example is a medical insurance premium, which can be claimed as a deduction under Section 80D of the Income Tax Act. Similarly, investment in tax saving mutual funds can be claimed as a deduction under Section80C. The amount declared by an employee at the beginning of the financial year should match the actual amount invested throughout the year.
Depending on the source of your income, different forms may need to be filled out. For instance, Vancouver’s speculation and vacancy tax is a separate form from the Government of Canada’s underused housing tax. In such cases, it’s a good idea to consult a professional. They can clear any confusion about your filings and ensure you’re covering all bases (and paying your taxes on time). Steuererklärung