Considering an employee's IT declaration is necessary for your organization to accurately calculate and deduct the appropriate amount of income tax from the employee's salary.
The difference between Income Tax (IT) declaration and Proof of investment (POI) is as follows:
Income Tax (IT) declaration: This is a yearly process wherein employees can declare their IT declaration to save tax deductions for the financial year. Generally, declarations are made at the beginning of the financial year, when a new employee joins, salary structure changes, and when there is a request from an employee to change investment details. Income Tax declaration helps you to estimate the employee's Income Tax.
Proof of investment (POI): It is a yearly process, where employees must provide necessary documents as proof of their investments at the end of the financial year. The taxable income and tax deductions will be re-computed based on the submitted POI documents.
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