Form 12C: Purpose, Documents, How to Fill Form 12C?

Form 12C is an essential document provided by the Income tax department. Employees submit this form to their employers showing any other source of income for deducting taxes besides their salary. In this article, get an understanding of the following:

• Usage of Form 12C
• Purpose of Form 12C
• What Information goes in Form 12C
• How to fill form 12C

Usage of Form 12C

In India, Form 12C is used to claim deductions while filing income tax returns. It is used to claim tax relief, such as interest payable, section 80C deductions, capital gains, etc. The information that goes within this form depends on the claim type.

Purpose of Form 12C

Indian citizens use Form 12C, which is an income tax form. Its main objective is to give an individual's employer information about their income from various sources so that the appropriate amount of tax is withheld at source (TDS). Let’s look at some other purposes of this form:

Income Details Submission

Employees with additional income, such as interest on savings, income from other sources, or rental income besides their salaries, must submit their income details through this form to their employers. Form 12C captures details of every other source of income.

Tax Deducted at Source (TDS) Calculations

Through the information in this form, the employers calculate the total tax that should be deducted from the employees' salaries at the source. The employer deducts employee TDS based on the total income and the tax slab.

Assessment of Tax Liability

This form assists in assessing an individual's tax liability by showing all the income generated from any source. This information is essential when filing income tax returns and understanding if any more tax liability is due for the individual.

What Information Goes in Form 12C?

Listed below are some information that a person must enter to complete the form 12C:

• Token number
• Name
• PAN number
• Residential address
• Phone number
• Particulars of income other than salaries
  • Interest of securities
  • Income from house property (for furnishing interest paid on Construction of the house)
    • Address of the house
    • Date of Completion of Construction
    • Owner of the plot
    • Whether owner-occupied or let out
    • If let out - rental income
    • If owner occupied - interest paid
  • Profit and gains of the business profession
  • Capital gains
  • Income from any other source

How to Fill Form 12C?

Here are the simple steps to fill out Form 12C by the employees:

• Download the form from the official website of the Income tax department. 
• Start filling out the form from the top by mentioning your details.
• Mention income other than your salary in the “Particulars of Income Other Than Salary” section.
• Attach the supporting documents as proof.
• Sign the form and submit it to your employer.
• You can also keep a copy for your reference.

You may clearly comprehend form 12C, a crucial document for tax computations, by reading the text above. It offers information about each revenue stream that your employer will utilise to determine TDS.