What Is Form 12bb: Purpose, Sample & Declarations To Be Included in Form 12BB

When you are employed, at the start of each financial year, you need to inform your employer about your tax-saving investments. Remember, this declaration is just an estimate, and you can update it as the year progresses. 

This blog will take you through the key details of Form 12BB, exploring its significance, a sample overview, and the crucial declarations to include. So stay on to the blog till last.

Declaring your investments is crucial as it affects your take-home salary. The actual supporting documents for these declarations only need to be submitted at the end of the financial year. Once you declare, and if your income is taxable, your employer calculates the monthly proportionate income tax (TDS) and deducts it accordingly.

What is Form 12bb?

Form 12BB is a document used for providing details of claims and deductions made by an employee for tax-saving purposes to their employer. 

It is a standard form that allows employees to declare various investment details, House Rent Allowance (HRA) details, and other tax-related declarations to ensure accurate TDS (Tax Deducted at Source) calculations by the employer. 

Employees are required to submit Form 12BB to their employer, typically at the beginning of the financial year or when joining a new organization. This form helps in determining the correct amount of TDS to be deducted from the employee's salary based on the eligible exemptions and deductions.

What is Form 12BB Used For?

Form 12BB serves the purpose of documenting an employee's investments and expenses for a given year. The Revenue Department has established this standard form to collect information on an employee's various investments and expenditures. 

It requires employees to provide a statement detailing these financial activities and submit supporting documents at the end of the financial year.

When starting a new job, individuals are required to fill out Form 12BB. As the year progresses, they must provide evidence for tax exemptions, claimed investments, and expenses mentioned in Form 12BB. Since June 1, 2016, it has been mandatory for salaried employees to submit Form 12BB to their employers to avail of tax benefits or claim investment rebates.

Sample View of Form 12BB

Preparations Before Completing Form 12BB

Examine your CTC structure to determine whether LTA or HRA is included in your package. These allowances can only be claimed if your employer incorporates them into your CTC. 

Obtain your certificate of interest and loan repayment from your bank, or download it along with your home loan and bank account statements. 

Gather all receipts related to your expenses, investments, and deductible amounts, such as LIC premium receipts, tuition fees, rent receipts, and more.

What Declarations Can I Include in Form 12BB?

When filing Form 12BB, you can declare the following tax-deductible salary components along with supporting proof:

1. Housing Rent Allowance (HRA):

In the initial section of Form 12BB, you can provide details to claim tax deductions on Housing Rent Allowance (HRA). To claim HRA, you need to provide:

   - Rent receipts with the name and address of the landlord.

   - PAN of the landlord (if the annual rent paid exceeds Rs. 1 lakh).

2. Leave Travel Allowance (LTA):

Employees can declare LTA for tax exemption. Section 10(5) of the Income Tax Act, 1961, provides tax-exemption benefits on LTA. Keep in mind that tax benefits on LTA can be claimed for domestic travel, limited to 2 times in a block of 4 calendar years.

3. Interest on Home Loan:

Take advantage of tax deduction benefits for your home loan, covering the principal repaid under section 80C and the interest payment under section 24. You can also include registration fees, stamp duty, and brokerage charges for tax deductions under various applicable sections.

4. Deduction u/s 80D, 80C, 80CCC, 80D, & 80E:

Declare various deductions under section 80C and its subsections while filing Form 12BB:

   - Section 80C: Premium paid for life insurance, investments in PPF, ELSS, NPS, tuition fees, etc., with a cumulative limit of Rs. 1.5 lakh.

   - Section 80CCC: Deduction on premium paid for an annuity plan.

   - Section 80CCD: Additional contributions made to NPS.

   - Section 80D: Section 80D is made up for covering medical insurance premiums.

   - Section 80E: Section 80E is to cover the interest paid on education loans.

   - Section 80G: Section 80G is to cover the donations furnished to specified organizations.

   - Section 80TTA: Interest income earned on a savings bank account.

Before Filling Form 12BB, Follow These Steps:

1. CTC Analysis:

Examine your CTC structure to determine if LTA or HRA is included. These allowances can only be claimed if your employer incorporates them into your CTC structure.

2. Bank Visit or Download Certificates:

Visit your bank or download certificates of interest, loan repayment, home loans, and bank account statements.

3. Collect Receipts:

Gather receipts for your expenses, investments, and deductible amounts. Examples include LIC premium receipts, tuition fees, rent receipts, etc.

Information Required for Form 12BB:

Provide the following details in Form 12BB:

1. Personal Details:

   - Identity proof

   - PAN number

   - Father’s name

   - Address

2. HRA (House Rental Allowance):

3. Leave Travel Authorization or Assistance:

4. Interest on Home Loan:

5. Small Details:

   - Date and place

6. Income Tax Deductions:

Completing Form 12BB with these details ensures accurate reporting of your financial information for tax purposes.

Also Read: Final Opportunity To Update Aadhaar Details for Free! New Guidelines Issued By UIDAI

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