Form 124 Income Tax Act 2025 – Complete Guide for Salaried Employees

Form 12BB has been replaced by Form 124 under the Income Tax Act, 2025, as under Section 392(5)(b) rule 205 of the Income Tax Rules 2026. Form 124 has to be submitted to your employer to claim deductions and exemptions. House Rent Allowance, Leave Travel Allowance, Interest on a home loan, or other investment-related benefits, along with supporting documents, so that your employer can factor these in while calculating your TDS. It is not compulsory; if you skip it, your employer may deduct tax on your full salary without considering the above-mentioned claims. 

What is the purpose of Form 124 of the Income Tax Act, 2025? 

Form 124 is the statement submitted by a salaried employee to their employer in order to claim deductions, exemptions and allowances, for example, HRA, LTA, interest on a home loan or other investment- related benefits, along with proof, so that the employer can take these into account while working out TDS on salary. 

Form 124 is for taxpayers who want to claim the following deductions and exemptions and need to submit Form 124. Self-employed individuals, freelancers, and business owners are not required to file this form.

What is the deadline for filing Form 124?

There is no fixed due date for Form 124, but you can submit it at the earliest so the employer has ample time to review your claims and calculate your TDS appropriately. Form 124 can be filed once every financial year. If you switch job during the year, you will also be required to submit it to your new employer, along with your income and TDS details from the previous employer, so your tax is computed accordingly for the entire year. 

Form 124- A detailed explanation  

Form 124 is divided into two Parts

PART- A

PART B: Claims and Supporting documents 

How to Submit Form 124?

Form 124 needs to be submitted to the employer. Since this declaration does not require submission directly to the income tax portal, there is no fixed procedure for submission. Depending on the organisation's policies and convenience, you can submit Form 124.

There are no penal consequences for not submitting Form 124. Your take-home pay will reduce due to increased TDS, resulting from not considering all the applicable deductions and exemptions. 

However, you can still claim those deductions while filing ITR, claiming the excess TDS deducted as a refund.