How to declare amounts under tax saving allowances?

All salaried employees are required to pay taxes according to the Central Government's rules and regulations. However, for employees with higher salaries, the tax amount can be significantly high. To reduce this, employers may include certain allowance components such as Leave Travel Allowance (LTA), Mobile Reimbursement, and Food coupons. The Government allows tax exemptions on such allowances for employees under different sections if they are part of their salary structure. Employees can claim these exemptions, and the system will take them into account when calculating their net taxable income. As a result, the total tax amount will be reduced for the employees.

To make declarations under tax saving allowances go to the My Finances (1) section of your portal and then go to Manage Tax (2). Now, on the Declaration (3) tab, scroll down to find the Tax Saving Allowances (4) section.

In this section, you can see the various allowances you are entitled to. To declare the amount for an allowance, click the Edit icon again it.

Update the amount under the Declaration column and then click on Save.

This will save the declared amount and you will be required to submit proofs for the save when the time comes.

If an employee is unable to make declarations, the Admin can do so on their behalf in the following way:

Search for the employee profile using the search bar and on their profile page and open the Finances (1) tab. Under this tab, select the Manage Tax (2) tab and then go to the Declaration (3) section. 

Scroll down and select the Tax Saving Allowances (1) in this tab. Under this tab, you can find the various tax savings allowances that you have allocated in your employee's salary structure. Click on the Edit (2) icon next to the allowance you want to declare the amount for. 

Enter the amount under the Declaration column and click Save.

This will save the amount that you have entered and will be considered for all further tax calculations. 

If an employee fails to declare tax-saving allowances, the components will become taxable at the end of the financial year, leading to a higher tax liability. Similarly, if an employee declares an amount without providing supporting proof and fails to submit the proof at the end of the financial year, the administration may reject the claim, leading to a higher tax burden for the employee. 
Moreover, failure to comply with tax-related regulations can impact TDS and quarterly returns.

If you want to know how you can approve the IT declaration proofs, you can check out this article.

Want to know more or have questions? Talk to our experts and we will be happy to help!