What is Form 12BB?
Form 12BB is a declaration of tax saving investments made in a financial year to claim deductions while filing your income tax return. This statement of investments must be made at the beginning of the financial year. To save tax, you must fill and submit this form to your employer and ask for exemptions on HRA, LTA, interest on house loans and other deductions under sections 80C, 80CC, 80CCD and 80D. Documented proof of these investments and expenses must be provided at the end of the financial year as well. Since 2016, submission of this form has been made mandatory by the Central Board of Direct Taxes.
Major Deductions One Can Claim using this form:
Before you proceed to e-file an income tax return, you need to have told your employer what investments you have made so that they can apply deductions at the time of deducting TDS at source.
Using this form, one should furnish the following details to claim tax deduction:
- House Rent Allowance:
The first segment of the form consists declaration of payments made as house rent. One has to mention the amount paid to the landlord, name of the landlord, addressed of the rented residence as well as the landlord’s PAN card no.
- Leaves travel concession or assistance:
As per one’s salary package, one has to mention the leaves travel concession or assistance expenses in under the second head of this form.
- Interest Paid on Home Loan:
The employee must provide the details of interest payable or paid to the lender, name of the lender, address of the lender and the PAN card number of the lender and some other pieces of information in order to get the exemption on tax.
Deductions under Section 80C, 80CCC, 80CCD and 80D and other deduction under 80E, 80G, 80TTA.
Under this head, one must provide the following details to get tax benefits.
- 80C: Premium to be paid for life insurance and/or investments to be made or has been made in ELSS funds, PPF, NPS and/or school tuition fees for children, etc
- 80CCC: Premium paid for grant plan
- 80CCD: Additional contributions made to NPS
- 80D: Premium paid for medical insurance
- 80E: Interest to be paid on education loan
- 80G: Donations made to specified organizations
- 80TTA: Interest income earned from savings bank account.
1.Why is it important to submit Form 12BB?
Employees must submit a declaration of deductions and exemptions that they wish to claim. The employer will deduct TDS on the employee’s salary based on the statement of investments provided. These investments are normally required to be made on the employer’s HR portal.
- What can be consequences of not submitting Form 12BB?
If your employer is not aware of your investments, then they will not give you any exemption on tax. Although, you can file income tax return and get a refund of the excess tax paid at the end of the financial year.