Purpose of Form 12BB for Income Tax

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All salaried people are required to submit an “income tax declaration” form to their employer at the beginning of the financial year. It is a provisional statement of proposed investments and expenses that are available as a deduction under the Income Tax Act. TDS is deducted from monthly salary after considering these proposed investments and expenses. At the end of the year, the employee is supposed to submit all investment proofs and tax receipts made during the year to the employer.  However, till now, there was no standard format for such declaration.
To deal with this abnormality, the Central Board of Direct Taxes (CBDT) has issued a new Form 12BB  w.e.f. June 1st, 2016. It is a standard template for all employees to declare their investments and claim tax deductions.

  • House Rent Allowance (HRA):

    You can claim deduction for HRA under Section 10 (13A) with the Form 12BB. You need to submit rent receipts, name and address of the house owner along with the Form 12BB. PAN of the landlord is also required if the total amount of rent paid exceeds RS 1 lakh per annum.

  • Leave Travel Allowance (LTA):

    You need to submit all expense receipts related to Leave travel to claim deduction for LTA along with Form 12BB.

  • Claiming all deductions under Chapter VI-A which includes deductions Section 80C, Section 80CCC, Section 80CCD, Section 80D etc.:

    For claiming deductions u/s 80, you need to submit all the relevant proofs of the investments made and expenses incurred along with Form 12BB.

  • Claiming Deductions Under Section 24 in Respect of Interest on a Home Loan:

    You have to submit Form 12BB along with an interest certificate specifying the name and address of the lending bank as well as PAN of the lending bank.

Introduction of Form 12BB is a significant initiative undertaken by the CBDT to bring uniformity in the procedure of claiming tax benefits to prevent tax leakages and discrepancies. It will make sure that taxpayers can file their returns smoothly and claim refunds they are eligible for.
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