When should you specify throws in the method signature, for which exceptions?

In Java, the keyword throws is specified in the method signature when the method can throw a checked exception that is not handled within the method. This allows the calling code to be aware of the possibility of an exception and take measures to handle it.

Checked exceptions are subclasses of Exception, except for RuntimeException and its subclasses. Exceptions of type RuntimeException (unchecked) do not require declaration in throws.

Example:

public void readFile(String path) throws IOException {
    // code that may throw IOException
}

If the method throws multiple checked exceptions, they can be listed separated by commas:

public void process() throws IOException, SQLException {
    // ...
}

In summary, throws is specified for all checked exceptions that the method does not handle itself.