Form 12BB - Investment Declaration & Format

The document must be submitted at the end of the financial year and is applicable to all salaried individuals. Taxpayers must also provide documents as a form of evidence of these investments along with Form 12BB. 

Purpose of Form 12BB

The following are the purposes of Form 12BB:

1. The benefits of all tax-deductible expenses and investments are provided to the employee by the employer.
2. The power allowing the employees to avail themselves of the benefit of claiming tax exemption through Form 12BB is given by the Income Tax Department to all the employers.
3. Employees who submit the proof or declaration of tax deduction in Form 12BB can only claim this benefit.
4. This Form must be completed by all the employees so that the employers can determine how much tax should be deducted from their monthly salary and what would be their take home salary.

How To Generate or Download Form 12BB?

The steps to download Form 12BB are given below:

1. Click on the link https://incometaxindia.gov.in/forms/income-tax%20rules/itrform12bb.pdf
2. You can click on the download button and download the Form 12BB and then take its printout and fill it correctly with all the relevant details.

What is the Purpose of Declaring Investments?

The purpose of declaring investments has been provided below:

1. On the basis investments declared, the employer deducts taxes at rates as per the prevailing slabs and remits the same to the government.
2. For TDS (Tax Deducted at Source), the deductor (employer) takes into account, expenses and investments liable to be taxed or tax exempted.
3. It reduces the tax burden on the assessee (employee) since income tax at source is deducted proportionately every month instead of a lump sum at the end of assessment year.

If you're working in a corporate company or a large organization, you would have probably submitted the declaration online, on the payroll portal of the company. The format varied from company to company since there was no prescribed format so far.

However, from June 1, 2016, employees are required to submit the statement of income and tax declaration in Form 12BB to the employer. Mandated by the Central Board of Direct Taxes (CBDT), this form will serve as the standard format for declaring investments. Along with the declaration, submitting paperwork as evidence to support the investments is also mandatory.

This form will contain provisions for the assesses to claim deduction in the following areas.

1. Deductions under Chapter VI-A which permits taxpayers to claim exemption under Section 80C, Section 80D and others available sections.
2. House Rent Allowance (HRA)
3. Leave Travel Allowance (LTA) and Leave Travel Concession (LTC)
4. Section 24 - Interest payable on Home Loan

What are the Various Sections of Form 12BB?

The opening section of the form contains provisions for the assessee to provide name, address, PAN and the financial year for which the declaration is being submitted.

• Section 1 deals with House Rent Allowance where the employee is required to provide details, such as:  rent amount paid to the landlord, Name and address of the landlord, PAN of the landlord (only if the rent paid in the previous year exceed Rs.1 lakh)
• The 2nd section deals with LTA or LTC as per the allowances in the salary. The employee is required to provide the proposed amount as per the basket of allowances if he/she is permitted to claim deductions under this category.
• In the 3rd section, information pertaining to interest on home loans should be furnished. Details such as name and address of the lender, interest paid or payable to the lender along with other information should be included.
• The 4th and the last section require you to provide deductions made under section VI-A of the Income Tax Act. It deals with investments such as life insurance and mutual funds. There are various sub sections under which the declarations should be made on the basis of investment type and upper cap on the amount.

Note: The information provided in the form should be validated by the employer for correctness before finalizing the form and processing it further.

Deductions to Claim

The following are the types of deductions that can be claimed:

1. HRA: Provide name and address of landlord along with rent receipt copy to claim HRA and also provide PAN of landlord in case the aggregate rent amount for the financial year exceeds Rs.1 lakh.
2. LTA or LTC: To claim LTA or LTC, add all the amount spent during travel and submit the proof of expenditure.
3.  Interest paid on home loan: To claim interest paid on home loan, submit the interest certificate along with name, address, and PAN in Form 12BB of the lender According to Section 24 of the Income Tax Act 1961.
4. Deductions under Section 80C, 80D, 80DD, 80G, 80GGA, 80GGC, 80TTA, and 80U: Fill out Form 12BB and submit it with all the required details and proof of expenses to avail tax exemption of all investment under Chapter VI-A of Income Tax Act.

What information is required to fill in Form 12BB?

The following are some of the significant information required to fill in Form 12BB:

1. Personal details, such as:
2. Name
3. Address
4. PAN number
5. Aadhar Number
6. Position or Designation
7. Father’s Name
8. HRA: House Rent Allowance
9. Leave travel concessions or assistance
10. Financial Year - Current Financial year
11. Income Tax Deductions under Chapter VI-A of Income Tax
12. Interest on home loan
13. Other Details such as Date, Place, Signature, etc.

How to Fill Form 12BB?

Here are the details about how to fill Form 12BB including the information to include:

Part 1: Personal Details

1. Full Name

1. PAN (Permanent Account Number)

1. Address

1. Financial Year (Current year: 2024-25)

Part 2: Claims and Evidence Details

1. House rent allowance (HRA)

You can claim HRA exemption if you live in a rented accommodation and have HRA as a part of CTC by submitting the following information:

1. Rent amount paid to landlord

1. Your landlord’s name and address

1. If the total rent paid during the year is more than Rs.1 lakh, then provide PAN number of landlord.

1. Submit the rental agreement or monthly rent receipts

Note:

1. You can also claim a similar tax deduction under section 80GG, if you live in a rented house but HRA is not a part of your CTC.

1. Rent receipt should be provided only if your monthly rent is more than Rs.3,000.

1.  If you are living in your own house, you cannot claim HRA exemption.

1. Rent paid to your parents must be reported as part of their income when filing their Income Tax Return.

1. Do not submit fake rent receipts to avoid tax-related trouble with tax authorities.

1. Print a formal rent agreement on stamp paper.

2. Leave Travel Concessions or Leave Travel Allowance (LTA)

To claim LTA benefit, you will have to submit travel documents like boarding passes, flight tickets, or travel agent invoices to your employer.

1. You will be eligible to avail yourself of LTA only if it is a part of your CTC.

1. The benefits of LTA can be availed by you, spouse, children, dependent siblings and parents.

1. LTA can be claimed twice within a four-year block (current block: 2022-2025).

1. LTA can be carried to the next block's first calendar year, if you claimed only one LTA in the previous block.

1. LTA is not applicable for international trips and applies only to domestic travel, not international trips.

Note: LTA does not provide any exemption for accommodation expenses.

3. Home loan interest

As per Section 24 of the Income Tax Act, interest on your home loan can be deducted by you and this deduction applies to the interest paid on a loan taken for either building, rebuilding, renovating, repairing, or buying.

You need to provide the following details while filing Form 12BB:

1. The interest paid or payable to the lender during the financial year 

1. Name of the lender

1. Address of the lender

1. PAN or Aadhaar number of the lender

The following are some of the tax saving benefits of a home loan:

1. Interest paid on loans for construction, purchase, repair, or renovation can be deducted.

1. For self-occupied property up to Rs.2 lakh can be deducted and for rented property full amount gets deducted.

1. Under Section 80C up to Rs.1.50 lakh deduction is provided which is valid for both self-occupied and rented property).

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Deduction for First-Time Buyers:  

1. Section 80EE: For loans below Rs.35 lakh on properties under Rs.50 lakh, up to Rs.50,000 additional deductions will be provided (valid for loans sanctioned till 31 March 2017).

1. Section 80EEA: For loans on properties with stamp duty value below Rs.45 lakh, up to Rs.1.50 lakh additional deduction is provided (valid for loans sanctioned between 1 April 2019 to 31 March 2022).

Evidence Required to be Submitted:  

1. Interest Certificate from your lender, as evidence of interest payment and loan type.

1. Possession or Completion Certificate for new or renovated properties.

1. To prove whether the property is self-occupied or rented, provide self-declaration.

4. Deductions under Section 80C, 80CCC, 80CCD

 covers deductions under various sections like 80C (investments), 80D (medical insurance), and 80G (donations) are covered under Chapter VI-A of the Income Tax Act.  

You can claim these deductions by submitting following proof of your investments or expenses:

Part 3: Verification

1. Complete the verification procedure by providing the following details:

1. Enter your name

1. Parent’s name

1. City 

1. Date along with signature

What are the things to be done before filling Form 12BB?

The following are the things to be done before filling Form 12BB:

1. Figure whether HRA and LTA are part of your package or not by studying your CTC structure
2. These can be claimed, if these allowances are a part of your CTC structure
3. Download the interest certificate and loan repayment schedule of your home loan and bank account statement by either visiting the bank in person or through online modes
4. Collect all the receipts for all the expenses and investments that are taxable, such as tuition fees, LIC premium receipts, receipts for rent, donations, etc.

What is the Format of Form 12BB?

Here are the details regarding the format of Form 12BB:

1. The standard format of Form 12BB has been made by the Income Tax Department
2. The format is prepared as per the 26 tax rules of Income Tax
3. The form can be downloaded in pdf or word format
4. The form can fill out online and can be submitted directly to the HR along with other required documents

Due Date for Form 12BB Submission

The Form 12BB submission due date is usually in January or February which is during the end of the financial year.