Investment Declaration for Tax Saving

What is tax avoidance?

Tax avoidance is the process of reducing an assessee's tax liability by using legal means. In order to reduce your tax liability on your salary income, you can claim tax deductions under a variety of sections of the Indian income tax law. For example, if you receive a house rent allowance from your organization and you pay rent for your accommodation, you can claim what is called House Rent Allowance Exemption. If you happen to pay for premium towards a life insurance policy for yourself and some of your family members, you can use the premium amount to reduce your taxable income. As the entity responsible for deducting tax from your salary and remitting the same to the tax department, your organization can allow you to submit declarations (rent details, insurance premium amounts, etc.) and correspondingly deduct lesser tax from your salary.

You can submit tax related declarations whenever you wish during a year. Please submit your declarations at the beginning of a year or as soon as you join your organization, and make changes to your declarations as and when required. HRWorks gives you the facility to submit your declarations online.

There are various sections under which you can claim exemptions. Of course, your declarations have to be as per what the tax law dictates. For each tax year, you need to submit provisional or initial tax saving investment declarations, and proof of investments thereof whenever your organization asks you to do so.

In HRWorks, the investment declarations employees enter are classified as initial or final depending on when a declaration is entered. Typically, all declarations entered at the beginning of a year are called “initial” for which no paper proof is required. Towards the end of the tax year (typically between January and March), after a certain date specified by your organization, the declarations you enter online are stored as “final” declaration. Once your declaration is marked as “final” in HRWorks you need to take a print out of the declaration, and submit the investment proof (house rent receipts, insurance premium receipts, etc.) along with the declaration sheet to your Finance department.

You can submit your initial declaration as many times as you wish in HRWorks. Whenever you submit a fresh declaration in HRWorks, the earlier declaration will be overwritten by the later declaration and the earlier declaration will be stored for the purpose of information only.

Monthly cut-off date for initial declaration

While you can re-submit your declaration as many times as you wish during a year, HRWorks, for tax calculation in any particular month, will accept only those declarations which have been submitted on or before a particular date (called the declaration cut-off date) in the month. This date is as per your organization's instructions. Any investment declaration submitted after the cut-off date will be considered for tax calculation only in the next month. For example, if 22nd is specified as the monthly cut-off date for acceptance of investment declaration in your organization, any investment declaration submitted on or after 23rd of the month will be considered for tax calculation only in the next month.

Kindly check with your HR/Finance team to get to know the monthly cut-off date or send us an email with your employee ID and organization name (support@hinote.in) for the cut-off date.

Cut-off date for final declaration

Please check with your HR/finance team to get to know the cut-off date for final declaration submission on HRWorks. Once the final declaration cut-off date is past, you will not be able to submit investment declaration for the year on HRWorks.