Form 12BB Income tax

Form 12BB of the Income Tax Department of India helps employees declare their investments and claims during a specific financial year. Based on the details provided in this form, employers calculate and deduct the appropriate TDS (Tax Deducted at Source) from the employee's salary. Learn about this form in detail to ensure you submit the right information to your employer.

Usage of Form 12BB 

A salaried individual needs to submit Form 12BB to his/ her employer to claim tax deductions and rebates on investments and expenses. In other words, it is a claim statement that employees need to provide to their respective employers at the end of a financial year. 

An employee has to declare his/ her investments during a financial year using this form. This acts as evidence of your investments and expenses that help you claim deductions.

Purpose of Form 12BB Download

The Central Board of Direct Taxes (CBDT) introduced this form for the following purposes:

• To allow salaried taxpayers to avail tax deductions on eligible investments and expenses.
• This form enables salaried individuals to claim tax exemptions under different sections of the Income Tax Act.
• To allow employers to determine eligible tax deductions from the monthly salary of their employees.

Important Things to Note for Form 12BB Filing

Here are the important things you need to remember while filing Form 12BB:

• Evaluate your CTC (Cost to Company) to determine if HRA (House Rent Allowance) and LTA (Leave Travel Allowance) are included.
• You can claim HRA and LTA if these are included in your CTC.
• Ensure you download your interest certificate for home loan and loan repayment schedule, followed by the bank statement, either online or offline by visiting your bank branch.
• You need to have all the necessary receipts, such as life insurance premium receipts, rent, donation, tuition fees receipts or other similar receipts.

Process to Fill Form 12BB

Filing Form 12BB can be hassle-free if you follow the process mentioned below for each of the parts:

Part I ( Personal Details)

You need to fill in the details mentioned below in this part:

• Name
• Permanent Account Number (PAN)
• Address
• Current financial year

Part II (Details of Claims and Evidence)

Here are the different sections of this part:

Allowance for House Rent: In case you reside in a rented property with provisions for HRA in your CTC, you can raise a claim for exemptions by providing the following details:

• The rent amount that you paid to your landlord
• Name and address of your landlord
• If you have paid rent exceeding ₹1 lakh in a financial year, you need to provide the PAN number of the concerned landlord.
• Rent receipt submission

Ensure you note the following factors about HRA:

• If your CTC does not have an HRA provision, you can claim a tax deduction for the same under Section 80G if you live in a rented property.
• In case your monthly rent exceeds ₹3,000, you need to provide a rent receipt.
• If you reside in an owned property, you cannot claim HRA.
• In case your parents receive rent from you, you need to report the same in your parents’ income while filing Income Tax Returns
• Ensure you submit original rent receipts.
• Experts recommend printing a proper rent agreement on a stamp paper of the applicable stamp duty amount.

Leave Travel Allowance: If your CTC has a provision for LTA, you need to submit documents such as boarding passes, travel agent invoices or flight tickets as evidence to your employer. You can avail this benefit, followed by your spouse, dependent parents, children, and siblings dependent on you. The frequency to avail this benefit is twice in four years. 

Moreover, if you claim one LTA in the previous block, you can opt for LTA carry forward in the following block (first calendar year). Notably, you can avail LTA benefits solely for domestic trips. International trips and accommodation expenses are excluded from LTA provisions.

Home Loan Interest: You can avail tax deductions on home loan interest under Section 24 of the Income Tax Act. If you have taken a loan for rebuilding, purchasing, repairing and renovating your home, you can avail this deduction. 

To claim tax deductions on home loan interest, you need to provide the interest paid or payable during a specific financial year. In addition, you need to provide your lender’s name, address, PAN or Aadhaar number.

Here are the additional tax benefits on a home loan:

• Payment of Interest: You can claim a tax deduction on home loan interest paid of up to ₹2 lakh for a self-occupied property and the total amount for a rented property.
• Repayment of Principal: You can claim tax deductions of up to ₹1.5 lakh under Section 80C for home loan principal repayment.
• Deduction for First-time Purchasers: If your home loan was sanctioned before 31^st March 2017 with a loan amount not exceeding ₹35 lakh, for properties less than ₹50 lakhs, you can claim deductions of up to ₹50,000 under Section 80EE.

In case your home loan was sanctioned between 1^st April 2019 and 31^st March 2022, you can avail up to ₹1.5 lakh deduction under Section 80EEA, provided the stamp duty value does not exceed ₹35 lakhs.

To avail the benefits mentioned above, you are required to submit specific documents, including an interest certificate from your lender, a possession or completion certificate for newly purchased or renovated property, and a self-declaration for rented or self-occupied property. The interest certificate is particularly important, as it specifies the type of loan availed and the total interest paid during the financial year.

Section 80C, 80CCC, 80CCD, 80D Deductions: You can claim deductions under Sections 80C (investments), 80G (donations), and 80D (medical insurance) as per Chapter VI of the Income Tax Act. Here are the documents that you need to submit to claim the same:

Part III: Verification

To complete the filing of Form 12BB you need to complete the verification process as the final step. You need to fill in your name, city, parents’ names and date, followed by your signature to verify the details.

Final Words

Form 12BB helps employees declare their investments and claims during a financial year. This further helps them claim tax benefits during a financial year to reduce their tax burden. Ensure you submit the form within the stipulated time to claim your deductions.

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