Form 12BB of Income Tax – Know Everything: Central board of direct taxation (CBDT) has recently issued a new form called “Form – 12 BB”. The purpose of this form is to bring an amount of consistency in regard to the submission of details relating to investments and any expenditure as IT declaration by the employees to employers.
Normally an employer calls for the IT declaration by his employees at the beginning of the financial year so as to enable his HR team the calculation of tax to be paid by each employee, thereby deducting the tax at source from their monthly salaries. Essentially this is a declaration by the employees which is provisional in nature containing the details of proposed investments and admissible expenditure such as rent etc.
Objective of Form 12BB:
Form 12 BB has come as a statutory prescription by CBDT making it compulsory for the employees to submit the details of their investments (though proposed) and admissible expenditure along with the necessary proof. CBDT has also made a suggestion to all the employers to assess the information and evidence submitted by the employees before calculating the tax to be deducted at source. Though it’s a new line of IT compliance it would better serve the interests of the employees as well as employers. Earlier there was no specific format in which employee has to furnish these details to employers. Form 12 BB would now serve as the one showing the format of disclosures.
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Areas of Form 12BB:
Detail information to be furnished in each section of Form 12 BB is as under:
House Rent Allowance (HRA):
HRA paid by the employer to the employees is exempted under section 10(13A) of the income tax. And the calculation for the same has been prescribed by this section. For the purpose of claiming this exemption employee has to provide certain details of his Landlord such as Name, address and PAN (if the aggregate amount of rent paid during the year exceeds Rs 1,00,000) and the amount of rent paid during the year. As a documentary proof along with these details employee has to furnish the rental receipts also.
Leave Travel Allowance:
For claiming the exemption under section 10(5) in regard of leave travel allowance paid by the employer to employee, details of total amount paid along with the proof for the same have to be furnished:
Payment of interest on home loan:
For the purpose of claiming interest paid on home loans admissible under section 24 of the income tax employee along with the proof of payments has to furnish the details of the lender such as his name, address and PAN.
Chapter VI-A Deductions:
This section is for the purpose of providing info relating to various investments and expenditure covered by chapter VI-1 such as:
Proof of the investments and payments made have to be submitted to employer along with form 12 BB:
After filling all the details employee has to give his declaration that the info is complete and correct.