When it comes to taxes, being transparent and organised is essential. Form 12BB is an essential document that simplifies the process of declaring your income as an employee.
In this article, we’ll walk you through everything you need to know about Form 12BB.
What is Form 12BB?
Form 12BB is a document used for income declaration in India. It is primarily used by employees to provide details of their income, allowances, deductions, and exemptions to their employers.
The purpose of Form 12BB is to ensure accurate calculation of Tax Deducted at Source (TDS) on salary. Employees are required to submit Form 12BB to their employers at the beginning of the financial year. It is a mandatory requirement for salaried individuals who wish to claim tax deductions on the expenses and investments made during the financial year. Employers rely on this form to accurately calculate TDS on the employee’s salary and report it to the Income Tax (IT) department.
Read More “How to file TDS return”
Structure of Form 12BB
The Form 12BB starts with the basic details of the employee, i.e., the Name and Address, PAN or Aadhaar Number and the financial year. After these basic details, there is a section for the details of the following claims:
1. House Rent Allowance (HRA)
Individuals staying at a rental accommodation can declare their rental expenses and claim a deduction. In this section, you need to enter certain details of your homeowner/landlord:
- • Rent you paid to the homeowner/landlord
- • Name and address of the landlord
- • PAN or Aadhaar number of the landlord. This is required only if your rental expense is more than Rs 1,00,000 during the financial year.
- • Evidence – You also need to attach relevant documents like rent receipts or rental agreements as proof.
2. Leave Travel Allowance or Leave Travel Concession (LTC)
This is an allowance provided to you by your employer that can be utilised for travel expenses. If you want to claim this deduction submit your travel expenses bills to the employer.
3. Deduction of Interest on Borrowing
If you have a home loan, you can claim a tax deduction on the interest paid. Provide the following details regarding your home loan:
- • Interest payable/paid to the lender
- • Name and address of the lender
- • PAN or Aadhaar number of the lender
4. Deduction under Chapter VI-A
In this section, you need to provide the details of the investments and other deductions you want to claim. The deductions available are:
- • Section 80C – If you have any life insurance premiums, children’s school tuition fees, or investments like National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), etc., you can mention them here.
- • Section 80CCC – Pension plans can be included here.
- • Section 80CCD – If you have contributed to the National Pension Scheme (NPS Tier-I account), mention the details in this section.
- • Section 80D – If you have made any medical insurance premiums, add them here.
- • Section 80DD – This section is if you have paid for the medical treatment of a dependent person with a disability.
- • Section 80E – You can include your education loan interest payments here.
- • Section 80EE – If you are a first-time homeowner and made residential loan payments, you can include the details here.
- • Section 80G – Any donations made to any organisation can be included.
- • Section 80GG – This is for the individuals who don’t get HRA and live in a rental accommodation.
- • Section GGA – If you have made any donation for scientific research or rural development, include those details in this section.
- • Section GGC – Non-cash donations made to any political party can be mentioned here.
- • Section TTA – Savings bank interest received can be included in this section.
- • Section 80U – Individuals with a disability can avail tax deductions under this section.
Is Form 12BB Mandatory?
To benefit from the expenses and investments made, salaried employees are instructed to file Form 12BB and submit it to their employers. If you don’t do so, the employer will calculate the TDS and deduct it from your salary.
Key Points to Remember While Filing Form 12BB
- • While filing Form 12BB, ensure the proofs you are submitting are genuine. In the case of any fake proof, there will be penalties levied.
- • If you switch jobs within a year, it is important not to claim the maximum deductions at both your new and old company. This is to avoid incorrect TDS calculations and potential tax liabilities with interest for late payments.
The Form 12BB offers you to save your taxes through the expenses and investments made throughout the year. So keep track of your expenses and file Form 12BB correctly. If you don’t have any investments that can help you in saving on taxes, get started now. Learn about tax-saving investment options and talk to a financial advisor. To kickstart your investment journey, open a demat account now on Angel One for free.
What is Form 12BB in income tax?
Form 12BB is a key document used for income declaration in India. It is used by salaried individuals to provide details of their income, expenses and deductions to their employers.
When do we need to submit Form 12BB?
Your employer would ask for the tax declarations at the start of a financial year to calculate the TDS. You need to submit your Form 12BB by the end of the financial year which is 31st March.
To whom do we need to submit Form 12BB?
Form 12BB for income tax is to be submitted to your employer. It is not to be submitted to the Income Tax department.
What is HRA in Form 12BB?
HRA stands for House Rent Allowance. If you are staying at a rental accommodation can declare your rental expenses and claim a tax deduction. For this, you need to provide your landlord details i.e., name, address, PAN or Aadhaar number along with the proof of rental payments made to the landlord/homeowner.
Where can we download Form 12BB from?
You can download Form 12BB from the official website of the Income Tax Department of India. The form is usually available in the “Forms” or “Downloads” section of the website. It is recommended to download the form directly from the official website to ensure its authenticity and accuracy.