Form 12BB is investment declaration that needs to be submitted by the employee at the beginning of every financial year. In order to properly deduct taxes from your monthly salary, your employer requests that you submit all of your tax-saving investments for the year. It is applicable to all salaried individuals.
Deductions like House Rent Allowance, Leave Travel Allowance, Interest paid on home loan, Investment deductions under section 80C, and other deductions needs to be declared in form 12BB.
At the beginning of the financial year, you have to just make an estimate of the investments that you intend to make. You don’t need to submit actual proofs until the end of the financial year.
What is Form 12BB?
Form 12BB is a statement of claims by an employee for deduction of tax.
Form 12BB has to be submitted at the end of the financial year. Form 12BB applies to all salaried taxpayers.
Documentary evidence of these investments and expenses can be provided at the end of the financial year as well.
Things to be Done Before Filling Form 12BB
The following are the things to be done before filling Form 12BB:
Figure whether HRA and LTA are part of your package by studying your CTC structure
These can be claimed, if these allowances are a part of your CTC structure
Obtain interest certificate and loan repayment schedule from the bank.
Collect the receipts for all the expenses and investments that can be claimed as deduction, such as tuition fees, LIC premium receipts, receipts for rent, donations, etc.
Filling out Form 12BB isn't as daunting as it seems. This guide will walk you through each section, explaining what information to include and how to claim maximum tax benefits.
Part I: Personal Details
Full Name
Address
PAN (Permanent Account Number)
Financial Year (Current year: 2024-25)
Part II: Details of Claims and Evidence
1. House rent allowance
If you live in a rented accommodation and have HRA as a part of your CTC, you can claim HRA exemption by submitting the following details -
Amount of Rent paid to landlord
Name of your landlord
Address of your landlord
PAN No. of your landlord if the total rent paid during the year is more than Rs.1 lakh.
Find out the HRA tax-exempt amount with our freeHRA calculator.
Note:
If HRA is not part of your CTC but you live in a rented house, you can claim a similar tax deduction under section 80GG.
You only need a rent receipt if your monthly rent is more than Rs.3,000.
You can’t claim HRA exemption if you are living in your own house.
If you're paying rent to your parents, it's advisable for them to report it as part of their income when filing their Income Tax Return.
Avoid submitting fake rent receipts; doing so could land you in trouble with tax authorities.
It is advisable to print a formalrent agreement on stamp paper.
Disclaimer: This image is for educational purposes only.
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.
Eligibility:LTA is only available if it's part of your CTC.
Who Can Benefit: You, your spouse, children, dependent parents, and dependent siblings.
Frequency: You can claim LTA twice within a four-year block (current block: 2022-2025).
Carry-Forward Option: If you claimed only one LTA in the previous block, you can carry it forward and use it in the next block's first calendar year.
Domestic Travel Only: LTA applies only to domestic travel, not international trips. No exemption for accommodation expenses.
3. Home loan interest
You're eligible to deduct the interest on your home loan as per Section 24 of the Income Tax Act. This deduction applies to the interest paid on a loan taken for building, rebuilding, repairing, buying, or renovating your home.
When filling out Form 12BB, you need to provide the following details:
The interest you paid or payable to the lender during the financial year along with name, address and PAN/Aadhaar number of the lender
There are various other tax saving benefits of a home loan:
Interest Payment: Deduct interest paid on loans for purchase, construction, renovation, or repair (up to Rs. 2 lakh for self-occupied property, entire amount for rented property).
Principal Repayment: Deduct up to Rs. 1.5 lakh under Section 80C (valid for both self-occupied and rented property).
Deduction for First-Time Buyers:
Section 80EE: Up to Rs. 50,000 additional deduction for loans below Rs. 35 lakh on properties under Rs. 50 lakh (valid for loans sanctioned till March 31st, 2017).
Section 80EEA: Up to Rs. 1.5 lakh additional deduction for loans on properties with stamp duty value below Rs. 45 lakh (valid for loans sanctioned between April 1st, 2019, to March 31st, 2022).
Evidence Required to be Submitted:
Interest Certificate: From your lender, showing interest paid and loan type.
Possession/Completion Certificate: For new or renovated properties.
Self-Declaration: Whether the property is self-occupied or rented.
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4. Deductions under Section 80C, 80CCC, 80CCD,80D
Chapter VI-A of the Income Tax Act covers deductions under various sections like 80C (investments), 80D (medical insurance), and 80G (donations). To claim these deductions, you can submit the following proof of your investments or expenses:
1. Public Provident Fund
Investment Proof:
Copy of the stamped deposit receipt paid during the current financial year, or,
Copy of passbook clearly mentioning the PPF account.
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2. ELSS Mutual Fund
Investment Proof:
Copy of the investment certificate in your name with date of investment, investment amount, type of investment, etc.
If you are submitting the proofs in Jan and plan to continue the SIP for FEB and March, you can declare it for those months as well.
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3. Life Insurance Policy
Investment Proof:
Premiums paid towards life insurance for self, spouse and/or children
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4.Tax-saving FDs
Investment Proof:
Copy of the deposit receipt, or passbook
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5. NSC
Investment Proof:
Copy of NSC Certificate in the name of the employee
6.Tuition Fees of children
Investment Proof:
Copy of tuition fees receipt paid to educational institutions along with the nature of payment (donation fees, capitation fees, sports fees, transport fees, uniform and stationery fees, etc.
Disclaimer: This image is for educational purposes only.
7.Office Term Deposit
Investment Proof:
Copy of deposit receipt (qualifying deposits are deposits over 5 years)
8. Medical Insurance Policy and Preventive Health check-ups under section 80D
Medical insurance premium paid, fees paid on preventive health check-up, and amount spent of medical treatment of senior citizens can be claimed as a deduction under section 80D.
Investment Proof:
Copy of premium receipt paid during the year. Copy of the bills of preventive health check-ups in the name of the employee or family.
9.Medical expenses under section 80DD (for handicapped dependents)
Investment Proof:
Proof of amount spent for medical treatment, training and rehabilitation of handicapped dependent, or, Amount paid towards or deposited in any scheme of LIC, UTI or any other Board approved insurer for maintenance of handicapped dependent.
Form 10-IA.
10. Deduction under section 80U
Investment Proof:
Deduction for disability up to Rs.75,000 (Rs.1,25,000 for severe disability) can be availed after providing a medical certificate from any Government Hospital.
A copy of certificate in Form 10-1A issued by a competent medical authority stating the percentage of disability should be submitted as proof.
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11.Interest Paid on Higher Education Loan
Section 80E provides deduction on interest paid for education loan during the financial year.
Investment Proof:
A copy of the bank certificate mentioning the principal and the interest amount paid and the amount payable
Disclaimer: This image is for educational purposes only.
12.Donations under section 80G
Charitable donations made can be claimed as a deduction under section 80G on satisfaction of conditions specified.
Investment Proof:
Valid receipts for the donations made that qualify for deduction under this section.
Receipts should be in the name of the employee.
Disclaimer: This image is for educational purposes only.
Part III: Verification
The final step in Form 12BB is verifying the details you've provided. Simply fill in your name, your parent's name, city, and the date along with your signature.
Frequently Asked Questions
What is the purpose of an investment declaration?
Employees have to submit a declaration of deductions and exemptions that they want to claim. The employer will deduct TDS from the employee’s salary on the basis of these declarations. These investments are generally required to be made on the employer’s HR portal.
When do I have to submit Form 12BB?
Usually, employers ask for a declaration at the start of the financial year to estimate TDS calculations for the whole year. Form 12BB has to be later submitted towards the end of the financial year.
Do I need to submit Form 12BB to the income tax department?
No, Form 12BB does not have to be submitted to the tax department. It has to be submitted to your employer.
I could not declare my investments on time and my employer deducted excess TDS. What should I do?
Should Pensioners submit Form 12BB to their pension paying Authority?
Yes pensioners need to submit the investment declaration with variations Aspension is Considered a deferred Salary for income tax purposes.
Is it mandatory to submit Form 12BB?
Form 12BB ensures that the correct amount of tax is deducted from the employee’s salary and is mandatory for salaried individuals to submit the form to claim tax deduction on expenses and investments made for the particular financial year.
Whar is the difference between Form 12BA and Form 12BB?
The information about perquisites and other allowances that the employee received throughout the financial year is provided in Form 12BA. The declaration that lists an employee's claims and investments for the financial year is Form 12BB.
What if I dont file form 12BB with the employer on time?
More TDS would be deducted by the employer, resulting in less take home. This TDS can still be claimed while filing ITR if the investments/ expenses are made.
About the Author
Ektha Surana
Content Marketer
Multitasking between pouring myself coffees and poring over the ever-changing tax laws. Here, I've authored 100+ blogs on income tax and simplified complex income tax topics like the intimidating crypto tax rules, old vs new tax regime debate, changes in debt funds taxation, budget analysis and more. Some combinations I like- tax and content, finance & startups, technology & psychology, fitness & neuroscience. Read more
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