Lawful processing
A key principle in the GDPR is that data controllers need to process personal data lawfully, fairly and transparently.
Like the Data Protection Act 1998, the GDPR sets out the list of lawful justifications for processing - often referred to as the “conditions for processing”. But what is new under the GDPR is an explicit obligation to tell people the legal basis for processing their personal data. So you now have to document and communicate this.
Another reason for needing to be clear about your lawful basis for processing personal data is that it affects the extent to which the individual can limit that processing. For example, if you are lawfully processing someone’s personal data because it is necessary for the performance of their employment contract, then they do NOT have the right to object to that processing.