What Is The Full Form Of ITD In Income Tax?
ITD full form in income tax is Income Tax Declaration. It’s an important paper that people with salaried jobs in India give to their bosses at the end of every financial year. This paper lists the ways the employee plans to save on taxes and other costs that can reduce their taxes. Bosses use these to figure out how much tax to cut from their employee’s salary each month. The process is backed by Section 192 of the Income Tax Act.
Process and Importance of ITD:
At the start of the financial year, employees need to hand in their ITD, often on Form 12BB. The same outlines the expenses and investments that can lead to a lower tax liability, such as monies remitted to the provident fund, premiums on life insurance paid, and home loan interest paid. This is the form given at the close of the financial year, it too needs evidence to substantiate the claims of the deduction for tax purposes. This helps in making sure employees do not pay more tax than required. It takes into consideration their expected savings and expenses, both of which may reduce tax costs.
What Happens If You Don’t Submit ITD:
Not submitting an ITD means that bosses won’t know about potential tax deductions, leading to more tax being cut from salaries. This would mean, as a result, more taxes would be taken out of the employee’s pay, and he/she would have to claim a refund when he files his/her yearly tax forms. This might alert the Income Tax Department.