Understanding Form 12BB

As a salaried individual, it's essential to understand the importance of Form 12BB in claiming tax benefits and rebates on investments and expenses. With effect from 1st June 2016, Form 12BB has become a mandatory document for salaried taxpayers to submit to their employers.

What is Form 12BB?

Form 12BB is a statement of claims by an employee for deduction of tax. It's a self-declaration form submitted by the employee to the employer, which is used to standardize the process of investment declaration.

When to Submit Form 12BB?

Form 12BB has to be submitted at the end of the financial year. However, employers usually ask for a declaration at the start of the financial year to estimate TDS calculations for the whole year.

What to Declare in Form 12BB?

Using Form 12BB, an employee has to declare the investments that they have made during the year. The following details need to be provided:

• HRA exemption details
• LTA benefit details
• Home loan interest details
• Deductions under various sections like 80C, 80CCC, 80CCD, etc.

Evidence Required

Documentary evidence of these investments and expenses has to be provided at the end of the financial year. This includes:

• Travel documents like boarding passes, flight tickets, or travel agent invoices for LTA benefit
• Interest certificate from the lender for home loan interest
• Proof of investments or expenses for deductions under various sections

Verification and Submission

The final step in Form 12BB is verifying the details you've provided. Simply fill in your name, your parent's name, city, and the date along with your signature. The form has to be submitted to your employer, not to the tax department.

Importance of Form 12BB

Form 12BB ensures that the correct amount of tax is deducted from the employee's salary. It's mandatory for salaried individuals to submit the form to claim tax deduction on expenses and investments made for the particular financial year.

Understanding the Sections of Form 12BB

Form 12BB has four sections that cover the following claims:

Section 1

Enter your name, address, permanent account number (PAN) or UID number, and financial year in the first section.

Section 2

Enter the details of your HRA claim, such as the amount of rent paid to the landlord, name, address, and PAN or UID number of the landlord. Note that if the total rent you paid in the previous year is over ₹1 lakh, you must provide either the landlord's PAN or UID number.

Section 3

To claim LTA benefit, you will have to submit travel documents like boarding passes, flight tickets, or travel agent invoices to your employer.

Section 4

You're eligible to deduct the interest on your home loan as per Section 24 of the Income Tax Act. This deduction applies to the interest paid on a loan taken for building, rebuilding, repairing, buying, or renovating your home. When filling out Form 12BB, you need to provide the following details:

• Name and address of the lender
• Loan account number
• Interest paid during the financial year

Section 5

Chapter VI-A of the income tax act covers deductions under various sections like 80C (investments), 80D (medical insurance), and 80G (donations). To claim these deductions, you can submit proof of your investments or expenses.

FAQs

Q1. Is it mandatory to submit Form 12BB?

Yes, it's mandatory for salaried employees to submit Form 12BB to their employer to claim tax deductions on their salary.

Q2. Can I submit Form 12BB after the financial year ends?

Yes, you can submit Form 12BB after the financial year ends, but it's recommended to submit it before the end of the financial year to avoid any inconvenience.

Q3. What happens if I don't submit Form 12BB?

If you don't submit Form 12BB, your employer will not be able to deduct the correct amount of tax from your salary, and you may end up paying more tax than necessary.

Q4. Can I claim deductions under Section 80C in Form 12BB?

Yes, you can claim deductions under Section 80C in Form 12BB by providing proof of your investments or expenses.

Q5. Can I claim LTA benefit every year?

No, you can claim LTA benefit only twice in a block of four years. The current block is from 2020 to 2023.

Q6. Can I claim HRA and rent paid to my parents?

Yes, you can claim HRA and rent paid to your parents, but you need to provide their PAN or UID number if the total rent paid in the previous year is over ₹1 lakh.

Q7. Can I claim deductions under Section 80D in Form 12BB?

Yes, you can claim deductions under Section 80D in Form 12BB by providing proof of your medical insurance premium payments.

Q8. Can I claim deductions under Section 80G in Form 12BB?

Yes, you can claim deductions under Section 80G in Form 12BB by providing proof of your donations to eligible charitable organizations.

Q9. Can I claim deductions under Section 24 in Form 12BB?

Yes, you can claim deductions under Section 24 in Form 12BB by providing proof of your home loan interest payments.

Q10. Can I claim deductions under Section 80TTA in Form 12BB?

No, you cannot claim deductions under Section 80TTA in Form 12BB as it's not covered in the form.

Conclusion

Form 12BB is a crucial document for salaried taxpayers to claim tax deductions on their salary. By understanding the different sections and providing the necessary evidence, you can ensure that the correct amount of tax is deducted from your salary.

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