If you are liable to pay tax, you must understand that a portion of your salary is deducted against Income Tax (Tax Deducted at Source, TDS) and remitted to the government. To compute TDS, your employer asks you to submit details of your tax-saving instruments and deductions.
Form 12BB comes here for your rescue. Form 12BB is a statement of claims for the deduction of tax. With effect from 1st June 2016, a salaried employee should submit Form 12BB to his employer to claim tax benefits or a refund on investments and expenses.
Using Form 12BB, you should declare your investments during the year. You should provide documentary proof of these assets and expenditures at the end of the financial year.
An Investment declaration is a self-declaration form of your estimated tax liability. Form 12BB is your required investment declaration form. You should submit it to your employer at the start of the financial year. Many companies send intimations to their employees regarding their investment declaration form submission. You must share all the details with your employer from the beginning of the financial year. It will help the company compute the correct TDS. It will drive you to tax savings.
However, you can declare other deductions as loss from a property, loan repayment, tuition fees, etc. in addition to your investments. You should file your Form 12BB Income Tax before your company starts computing the TDS.
What is the 12bb income tax?
Form 12BB is a statement of your claims for tax deduction purposes.
You can declare deductions allowed for authentic investments or any such expense on which you are liable for a tax return through this form.
You should submit Form 12BB for your tax deduction, tax benefits, or a rebate on investments and expenses. Form 12BB comes into effect on 1st June 2016. You must submit form 12BB by the end of the financial year.
You should make an investment declaration for your investments and expenses to generate Form 12BB. You should declare the following investment under Form 12BB.
Home Loan Interest
If you avail of a home loan, you need to provide a home loan interest certificate as proof.
Leave Travel Concession
If you have obtained or are obtaining LTC for 2018-2021, you can claim the tax exemption without travel. You have to submit bills and vouchers for such expenses as proof.
House Rent Allowance
If your employer pays you HRA, you can submit proof of receipt and expenditure to save your tax. Submit information about your rent and the name and address of your owner to calculate the taxable portion of the house rent allowance to your employer.
If you have earnings through other modes, such as interest from fixed deposits, dividends from the stocks you might hold, capital gains, or gifts, you must declare those to your employer.
The above said are the several deductions you can declare in your Form 12BB and submit to your employer. It helps to reduce your tax.
Who does the employee need to submit Form 12BB?
Every salaried employee should submit Form 12BB to their employer before TDS. Your employer computes your TDS based on the investments you declared in your Form 12BB. Thus, submitting Form 12BB becomes mandatory for every salaried employee effective from 1st June 2016.
Can Form 12BB be submitted with an excess investment declaration?
You should submit form 12BB which is the declaration of your investments during the financial year. If you declare higher investments and expenditures, it will result in lower taxes, as the amount gets deducted from the salary. However, if you fail to provide proper documentation for such declaration, you will have to pay tax on the excess amount declared on which TDS was not applied.
You must have all the necessary documents in case of an excess investment declaration. If you fail to do so, you are liable to pay additional tax for the investment you made.
How to get Form 12BB?
You can download Form 12BB from the Income Tax Department’s official website.
- Add your details such as your name, address, PAN number, etc.
- Mention the financial year in which you are about to declare Form 12BB.
- Add your rental expenses, if you avail of the benefits of HRA.
- Add LTA details, if any.
- Add your loan details. If you are paying interest for a home loan or any mention the details in the Form 12BB
- Add details of your tax deductions under sections 80C, 80CCD (1B), 80D, 80DD, 80E, 80G, etc.
Once you complete filling in all the details, you can submit the form to your employer. Your employer calculates your TDS based on the information you gave in Form 12BB.
FAQ- Form 12bb Income Tax
Where should I submit Form 12BB to the Income Tax Department?
No, you should submit your Form 12BB to your employer. Your employer calculates your TDS based on the investment information you have given. After computing the TDS, your employer will submit the form on your behalf to the Income Tax Department.
Is it mandatory to file Form 12BB?
If you are a salaried employee, you must submit Form 12BB with effect from June 1, 2016, with your employer to benefit from tax breaks on eligible investments and expenses. Similarly, you should also submit the necessary written proof along with Form 12BB.
Form 12BB Income tax Download word/ excel
You can download Form 12BB from the Income Tax Department’s official website either in Word or Excel. Once you download the form, you can fill in the required information and submit it to your employer.
Where to invest to claim deductions under Form 12BB?
To claim deductions under Form 12BB, you can invest your money which comes under the following sections of the Income Tax Act.
- Section 80C allows you to reduce your taxable income up to a maximum of Rs 1.5 lakhs every financial year. Section 80C includes investments such as mutual funds, ELSS, life insurance policies, Public Provident Fund, premiums due on ELSS funds, National Pension Scheme, etc.
- Section 80CCC allows you a deduction for payment towards annuity pension plans, including interest or bonus charged on the annuity.
- Section 80CCD includes the National Pension Scheme. There is no need to submit evidence about NPS if your investment is under Rs 50,000, but you should submit proof of PAN card and NPS transaction statement if you exceed the limit.
- Section 80D covers deduction for medical insurance premiums. The medical insurance is for self, spouse, children, and parents (under 60). The maximum deduction that you can avail for paying medical insurance premiums is Rs 25,000 a year.
If you invest in any of these sections, you can claim a tax deduction by declaring them in Form 12BB.
Form 12BB income tax is a statement of claims for the deduction of tax. You should declare all your investments in a financial year in Form 12BB and submit it to your employer. With effect from 1st June 2016, it is mandatory to submit Form 12BB to your employer to claim tax benefits or a refund on investments and expenses. Your employer calculates your TDS based on the information they get from your Form 12BB.
You should provide documentary proof of these assets and expenditures at the end of the financial year.
Thus, Form 12BB helps to reduce your taxable income and hence your tax of course.
Rebate in Income Tax (Ultimate Guide)