IT Declaration

Besides helping you process your monthly pay runs, Zoho Payroll handles your employees’ Income Tax saving investments. Employees can declare the investments that they’ve made and submit proofs for the same, and Zoho Payroll automatically calculates the Income Tax based on the type and amount of each investment. The main incentive for employees’ to declare their investments is that it reduces their net taxable income, thereby decreasing the amount they need to pay as Income Tax.

How can employees declare their investments?

Investment Flow

IT Declaration

Keeping up with the changes proposed in the Union Budget for 2020, Zoho Payroll has introduced the option to choose between the new and the old tax regimes while submitting IT Declaration. Employees can submit their IT Declaration through the employee portal once you release it. However, for employees for whom you haven’t enabled employee portal, you can submit it by following these steps:

Submit Declaration

You will be redirected to the Tax Comparison page. Here, you can opt for either the new regime or the old regime.

Note: By default, the Old Tax regime will be selected for all the employees.

If you want to opt for the new tax regime:

Submit Declaration

The IT Declaration consists of the following sections:

House Rent Details

If your employee lives in a rented accommodation, provide the following details.

House Rent

Home Loan

If your employee is repaying a home loan for their self-occupied property, provide the following details.

Home Loan

Let Out Property Details

If your employee is a landlord, provide the following details about their let out property.

Let Out Property House Loan

80C Investments

Section 80C contains a list of tax saving investments such as Life Insurance, Mutual Funds, NABARD Bonds and Unit-linked insurance plans. Select an investment and enter the invested amount to declare it. The maximum limit for investments under Section 80C is ₹1,50,000.

80D Investments

Section 80D contains Mediclaim policies for your spouse, children, parents and yourself. Select a policy and enter the invested amount to declare it. The maximum limit for investments under this section is ₹1,00,000.

Other Investments

All miscellaneous investments will be listed under this section. Select an investment and enter the invested amount to declare it.


Other Sources of Income

If your employee receives income from sources other than their current job, they have a legal obligation to declare it here.

Other Sources of Income

Click Save and Submit.

The declared amount will be subtracted from the employee’s net income. Income tax will be calculated on this deducted income, also known as the net taxable income.

Switching Tax Regimes

You can switch tax regimes before the first payroll for the financial year is completed. To do this,

Submit Declaration
Process your employees' Investment Declarations easily using our Investment Declarations ebook.
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