Automate the Tax Declaration Process With RazorpayX Payroll

Depending on the financial year, an employee needs to declare their investment plans so that their employer can calculate and deduct tax at source (TDS) proportionately from their salary payments. To make the process easy for employees, they are expected to submit their investment proofs in form 12BB. The information provided in the declaration is shared with the entity deducting TDS and influences the final net taxable income that gets reduced.

While the process is simple for salaried employees, it becomes complex for freelancers and self-employed people in Germany. These individuals need to submit a separate annual VAT declaration known as the Umsatzsteuererklärung (Umsatzsteuererklarung) while small business entrepreneurs (Kleinunternehmer) are exempted from the requirement. In addition to these, the self-employed need to keep records of their earnings and expenses backed up by receipts.

With solutions integrated within your company’s ERP, it is possible to automatically generate different files or any type of declaration in compliance with the format and technical requirements set by the tax agency. This enables faster communication with the tax authorities and helps in automating the entire tax declaration process.

The software used to manage these processes helps in reducing the paperwork burden for both employees and employers, especially with the implementation of a fully automated workflow. This is achieved by using a system that can process digital documents such as PDF, JPEG and Excel. It can also extract information from data in the source system and generate tax declarations based on it, which eliminates manual processing, reduces errors and enhances efficiency and productivity.

To simplify the process, RazorpayX Payroll uses an application to collect and store investment proofs. These proofs are then verified and approved by the team before being forwarded to the tax authority. This way, all the employees can file their taxes correctly and on time. This automation streamlines the entire process of managing investment proofs for employees as well as employers. It also helps in ensuring that the process is compliant with the law and adheres to best practices. Moreover, it ensures the security and confidentiality of personal data, which is essential for any business. Steuererklärung

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