Taxes are less of a hassle for most of the salaried taxpayers. They generally do not worry about paying taxes through the year as their taxes are deducted and submitted by their employers. Similarly, saving taxes is also easier for them as they can inform their employer about their planned tax saving expenses and investments at the beginning of the Financial Year. At the end of the Financial Year, they can submit investment proofs along with Form 12BB which is an investment declaration form for salaried taxpayers. In this guide, we will talk about Form 12BB in detail.
Form 12BB is a form prescribed by the Central Board of Direct Taxes or CBDT for salaried individuals to declare their investment. Earlier there was no standard form for making declarations but from June 1, 2016, the process was standardized with the introduction of Form 12BB.
Employers deduct TDS from the salary of employees if their income falls in the taxable limit. To avoid TDS deduction, employees declare their investments usually in the months of January and February.The Finance Act, 2015 had introduced section 192(2D) of the Income-tax Act, 1961 (the Act) wherein the person responsible for making payment of salary (employer) was obliged to collect the necessary evidence or proof in the prescribed form and manner to allow any claim for any deduction and/or tax saving investments.
Following tax deductions can be claimed with the help of Form 12BB:
In the first part of Form 12BB, you can fill the details required to claim tax deduction on HRA. To claim HRA, you need to provide details like name and address of landlord and actual rent paid.
If the rent paid during the year exceeds Rs. 1 lakh, you also need to provide PAN of landlord.
Along with the details mentioned above, you also need to provide rent receipts.
In case, if you are paying the rent by cash, you have to affix revenue stamp on the receipts.
[ Read: House Rent Allowance ]
Salaried employees also need to submit travel related expenditure proofs to their employers if they want to claim tax deduction on LTA/LTC.
The total expenditure being claimed as well the number of documents being submitted should be mentioned in Form 12BB.
The bills (travel tickets) for your travel against LTA can only be claimed via your employer. LTA is allowed to be claimed twice in a block of four years. The current block is 2014 to 2018. You are allowed to carry forward your unclaimed LTA to the next year, so you can request your employer to not deduct tax on it and allow you to claim it next year.
[ Read: Leave Travel Allowance ]
To claim tax deduction on interest paid for home loan, you need to provide details like interest paid /payable, lender’s name, lender’s address, lender’s PAN in Form 12BB.
Stamp duty, registration fees and brokerage expenses paid towards transfer of the property can be claimed as deduction. However, if you transfer the property before the end of 5 years from the year in which you took possession of the property, the deduction claimed will be added back to your income and you’ll have to pay tax on it.
[ Read: Interest Payment on Home Loans ]
Here you need to provide necessary evidence for all the sections under chapter VI-A for which you want to claim tax deduction.
Investment proofs required to claim some common deductions under chapter VI-A are mentioned below:
Section 80C: This section provides tax deduction on a variety of things. If you want to claim tax deduction u/s 80C, you need to submit the following investment proofs.
Section 80D: To claim investment in health insurance, copy of premium receipt paid during the Financial Year can be submitted. You can also submit receipt(s) that are paid towards health-checkups.
Section 24B: To claim the total interest paid on your home loan during the FY, you have to submit; Loan statement or interest certificate from your banker or home loan provider. You also have to submit completion certificate or occupancy certificate. Self-declaration whether the house is self-occupied or let-out one.
(Section 80G) Donations to charitable institutions: Receipts of donations are considered as proofs. Typically the receipt issued by the charitable organization you donate do mentions the eligibility under Section 80G. Kindly note that you may not be able to claim this deduction if your donation is made in cash and exceeds Rs 10,000.
Education Loan (Section 80E): Copy of loan certificate reflecting the interest payments.
Medical Allowance: Do not get confused between your medical reimbursement allowance and mediclaim expenses. Medical allowance is provided by your employer. It is part of your employment agreement (salary structure) between your employer and yourself. To claim this allowance, you need to submit original medical bills with Doctor’s prescription(s) copies. The medical reimbursement allowance is exempted under Section 10 of the Income Tax Act.
Medical Treatment on handicapped dependent (Section 80DD): Copies of medical bills and duly completed Form 10-IA have to be submitted.
Medical treatment expenses for the specified disease (Section 80DDB): Medical Bills / expenditure incurred by way of medical treatment for a specified disease along with a certificate from a hospital in the prescribed form. Earlier, to claim Tax deductions under Section 80DDB, it was mandatory for an individual to obtain ‘Doctor Certificate’ or ‘Prescription’ from a specialist working in a government hospital only. This condition caused undue hardship to the persons intending to claim tax deduction. Now, CBDT (Central Board of Direct Taxes) has issued a notification relaxing this condition. Specialist Doctors working in Private hospitals also can issue a ‘certificate / prescription’ now). Download Form 10I.
NPS Contributions (Section 80CCD): Copy of the stamped deposit receipt, paid during current financial year and copy of the Passbook with clear mention as NPS (National Pension System) Account .
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