Form 12BB -Changes in declaring HRA, LTA and Sec.80 deductions

Income Tax Department recently launched new Form 12BB. This is the single form to declare HRA, LTA, Section 80, and interest paid on home loans under Sec.24 of IT Act.

All salaried know that at the start of a financial year or while you join the organization newly, then you have to declare the provisional list of products where they want to invest for tax saving. Usually, this will be available on your company’s portal. For example, you have to declare the amount you pay towards life insurance, health insurance, the fee payable to your kid’s, PPF, ELSS or home interest and principal you will pay.

Employers need this information to arrive at your net taxable income after these investments, expenses like HRA and other tax saving options. Based on this, employers calculate the tax payable from you. This tax liability of your’s will be deducted from your salary on the monthly basis and deposited with IT Department.

As I said above, this is just a PROVISIONAL list. You are not at all obliged to invest that much. Many do so much research while declaration this provisional declaration at the start of financial year. However, do remember that based on your actual investment during the financial year, your tax liability will be fixed.

As the financial year-end approaches, like in the month of January or December, your employer asks you to submit the income proof. Based on this actual proof, they recalculate the income tax liability. Finally, start to deduct the tax deduction up to the month of March.

What are the scenarios you will find in this case?

# Your actual investment is less than a provisional declaration.

Your employer calculates the actual tax liability before the financial year-end and starts to deduct tax based on the actual investment. In such situation, you may end up in paying more tax and your take home salary will drop during these last months of the financial year.

However, if you invest at the last minute, like at the end of March, then your tax liability may go down. However, your employer may already deducted higher tax. In that case, you have to file IT return at the end of the financial year and get it refunded from IT Department.

# Your actual investment is equal to a provisional declaration.

Your taxable income will be same as per earlier declaration. So based on this your employer may be deducting tax and you may not feel the pinch of more TDS.

# Your actual investment is more than the provisional declaration.

In such situation, your employer will deduct more tax. Hence, you have to file IT return on your own at the end of the financial year and claim the refund of tax.

As of now, there was no standard form or format to declare all such deductions. However, effective from 1st June, 2016, to claim income tax deductions, you must fill the newly launched Form 12BB. Along with that, you have to provide the proof of such investments or expenditure for deductions.

What are the deductions you can claim in Form 12BB?

#House Rent Allowance (HRA)-You can claim HRA exemption under IT Act of section 10 (13A). To claim HRA, you have to documentary evidence like rent receipts. Along with receipts, you have to submit the below information in Form 12BB.

You can claim HRA exemption under IT Act of section 10 (13A). To claim HRA, you have to documentary evidence like rent receipts. Along with receipts, you have to submit the below information in Form 12BB.

  • Name of a landlord.
  • Address of a landlord.
  • PAN number of a landlord.

Note-Permanent Account Number (PAN) shall be furnished if the aggregate rent paid during the previous year exceeds one lakh rupees.Form 12BB

# Leave Travel Allowance (LTA)-Now it is mandatory to submit the travel expenditure proof if you want to claim deductions.

Now it is mandatory to submit the travel expenditure proof if you want to claim deductions.

Deduction of interest under the head “Income from house property”

Earlier to claim deductions of interest you paid towards your home loan under Sec.24 of IT act, you used to submit the interest certificate from the bank/financial institution with the total interest and principal paid/due for the FY. However, from now onward, along with this certificate you have to submit below information also.Form 12BB Sec.24

  • Interest amount payable or paid.
  • Name of the lender or bank.
  • Address of the lender or bank.
  • PAN number of the lender or bank.

# Deduction under Chapter VI-A

Deductions under Chapter VI-A means from Sec.80C to Sec.80TTA. You have to provide the details of such deductions and also the proof need to be submitted.Form 12BB for Sec.80C

By bringing in the Form 12BB, IT department streamlined the claiming of deduction under one roof. Hope this information is helpful for all.

Remember below points-

  • You have to use Form 12BB only if you are claiming deductions. Otherwise, it is not mandatory to use while filing IT return.
  • Still there is no need to attach proof while filing IT return. But it is mandatory to show the proof to your employer.

Download the Form 12BB.

72 Comments

  1. Can I claim HRA exemption (having proper documents of rent aggrement and rent receipt etc. )while living with parents in their house?

    Reply
  2. Hello Sir!
    Actually one of my colleague’s information in form 12BB is wrongly filed.
    More of the TDS is deducted than actual. It’s the mistake from the part of third person who interchange the details of two different employees. Notice from income tax came. Kindly provide the remedy please

    Reply
    • Dear RV,
      You have to revise the IT return and rectify the same.

      Reply
  3. Hello Sir,
    I wanted to know that me and my Husband have a joint home loan, so can we both claim under income from Housing loan ..please help to know

    Reply
    • Dear Aarti,
      Yes, you can claim so but in the proportionate equal to the ownership in the property.

      Reply
  4. Dear Basu,

    I am a PSU employee. I have two queries:
    1) Do I have to add DA(Dearness Allowance) while calculating HRA exemption along with Basic salary?
    2) My employer didn’t consider HRA exemption for FY 16-17. Now, I want to avail the same while filing IT returns online but couldn’t find where to enter it. How to avail it?

    Reply
    • Rahul-1) Yes, salary for purpose of HRA is Basic+DA.
      2) Refer instruction provided by IT Dept.

      Reply
      • Thank you Basu.

        Reply
  5. Hi sir, old tell who will retain this form 12bb and whether we had to submit hard copy to it IT department

    Reply
    • Ashwani-It is the provision declaration, which you have to submit to employer.

      Reply
  6. Hello Sir,

    Based on your response to Aish’s comments, can you provide a link or a legal document explaining that declaration by the landlord will suffice?

    My employers have provided the 12BB amendment copy. But, it does not talk about the declaration part.

    Reply
  7. where do I mention income from house property and income from other sources in form 12bb?

    Reply
    • Muthu-Please refer above post. I already mentioned what type of details you can mention in Form 12BB. Rest all you have to declare while filing IT return.

      Reply
  8. Hello Sir,

    I have declared in the month of april’16 that i will be doing so and forth investments in 2016. but later on I want to invest into some other investment avenue (other than what i declared in investment form). will that be fine because at the end of the form its written “The above particulars of investments and deductions made by me for Financial Year 2016-2017 are true to the best of my knowledge and belief. I am also aware that the Company will be considering the above details in utmost good faith based on the details provided by me and that I am personally liable for any consequences arising out of errors, if any, in the above information.

    I am also aware that any person making a false statement / declaration in the above form shall be liable to be fined and prosecuted under section 277 of the Income Tax Act.”

    I am confused kindly help.

    Reply
    • Ullas-You can declare but can plan as per your finance. During financial closure, your employer will deduct the TDS based on proof you provided at the end.

      Reply
  9. Hi,
    How can I get Bank PAN number? So that I can write at the section: deduction of interest.

    Reply
    • Arindam-Bank PAN number not required. Bank just deduct TDS on behalf of you.

      Reply
      • Hi Basvaraj,

        If Bank PAN number not required, then whom PAN number need to enter in the place of Lender PAN number.

        Regards,
        Uma Ulisi

        Reply
        • Uma-Using Form 26AS, you can easily find the banker’s PAN number (deductor).

          Reply
          • Bank PAN is not listed in 26AS

            Reply
  10. Hello Basavaraj,

    I have a property which is co-owned with my wife and we have rented it out. Loan payment is done through my bank account and I have been claiming exemption for the home loan interest.

    Is it OK to show the rent income on my wife’s name as she is the co-owner or do I need to show the same as my income only?

    Reply
    • Gaurav-You can show the rental income based on the % of property you both owned.

      Reply
      • Does that mean 50% as my wife’s income and 50% as my income? This is the only property we have rented out and there is no other co-owner involved.

        Reply
  11. What if owner refuses to give pan number ? Will the declaration of not having pan card work?
    Why government do not think about this situation?
    If it is known that owner owns a house and have a rental agreement showing rent amount, why don’t government takes action against them and just pressurize the tenant?

    Reply
    • Aish-Yes, if owner not owning PAN card then self-declaration by owner is enough. On the basis of rental agreement income can’t be tracked. With PAN it is easily.

      Reply
      • Thanks sir .
        I thought that the pan number is must and declaration will not work.
        The main reason for not giving the pan number is that owner donot want to get his income tracked. Surprisingly they have so much confidence that they are ready to give declaration. I don’t think that a person who has 50-60 lakh worth flat will not have pan card.
        One more question sir..
        We need to submit this declaration at the end of the year as earlier or we need to give it at the time of filling form 12 bb.

        Reply
        • Aish-If he is ready to give declaration then take it. Future headache is his not your’s. You have to give this declaration while filing IT return.

          Reply
          • Thanks a lot sir !!

            Reply
            • My employer has informed me that it is compulsory to give pan number. Now on wards the declaration will not work.
              Can I show him any evidence to convince that declaration can work. Any help?

              Reply
  12. How to get the PAN number of the lender(i/e. Bank) for form 12BB.

    Reply
      • I checked from officials of my lender bank. They don’t even know that bank has a PAN number!!!!

        Reply
  13. Dear Sir,

    There is 1 confusion.

    Form 12 BB is use for investment declaration at the start of FY. or at the time of proof submission in the month of January.

    Regards,
    Siddarth

    Reply
  14. Form 12BB- will it replace our old saving declarations , it does not have column for previous employer income, previouse employer TDS, income from other sources, Income/Loss from house property. Where will the employee mention this details which was earlier given in savings declaration form

    Reply
    • Chitra-Yes, this form will be replace the old form. Your employer concerned about the salary outgo from his pocket. So, for him past months income from different employer does not matter. If you have two or more employers in a year, then you have to file IT return on your own after the financial year end. You have to mention only the investment details.

      Reply
  15. Sir

    As per my understanding Form 12BB needs to submit in the beginning of the year to enable employer to deduct tax on average. However, most of the declared investments are done during the year any time before submitting the final proof. So the amount will not be final at the time submitting 12BB also proof may not be available. At the same time 12BB is asking for proof of investments u/s 80C, 80CCC etc. also when it is submitted. How we will handle it? Is it okay only to submit form with relevant details in the beginning of the year and later the proof with final 12BB? Is there any legal implication.

    I find your advises are very useful

    Thanks

    Reply
  16. Sir,

    Kindly give your mail address .

    Reply
  17. Hi Basu,

    I want to ask 2 years back i booked i flat which was under construction for that i was paying pre emi (interest part only) as i didn’t have possession letter hence i couldn’t declare in IT declaration under deductions, now i got possession letter, so my question is am i eligible to claim interest paid in last 2 years.

    Reply
    • Sumedh-Yes, you can claim that by dividing in 5 installments a year for next 5 financial years.

      Reply
      • So in this FY i can claim, so while filing in which section i should be mention,i mean in loss from property or any other field

        Reply
  18. I am paying Rs 15K rent per month and want to claim HRA and my owner says he does not have PAN . What should I do now? Please suggest

    Reply
    • Prathap-In that case he must be ready to sign a declaration stating that he does not have PAN.

      Reply
  19. Sir,

    When we need to collect Form 12BB from our employer whether beginning of the year or end of the year. Is this form replacing declaration we are collecting from our employees

    Reply
    • Prakash-It is beginning of a year. They provide you this. Yes, the old declaration with replace this.

      Reply
  20. Now it is mandatory to mention the Bank PAN no on which we have taken home loan. But my bank says that they have not received any such instructions. How to get the PAN of my bank. I have a home loan with Axis bank chennai.

    Reply
    • Sheik-In my view, they have to. Let them give in writing at least that based on their KYC details you are holding the loan.

      Reply
  21. Hi Basvaraj,

    I have taken 2 properties on rent for me and my family. I pay 20k pm at my home town for my family and another 11k in Gurgaon. Can I claim HRA for both or I have to choose only one(with higher amount) out of that?

    Thanks in advance.

    Reply
    • Gaurav-You can claim the one which is nearest to your workplace.

      Reply
  22. Hello,

    I am currently residing outside India and have NRI status. I am thinking to do some investment on my father’ name (Senior Citizen) in India. probably post office scheme etc.

    If i give 10 lakhs cheque as Gift amount to my father from NRI account, will he need to pay any GIFT tax?
    Does he need to disclose where the money is coming from, or he can simply open the post office deposit?

    thanks in advance.
    Mandar

    Reply
    • Just to add some more details :
      1. He is not having any other income at present.
      2. I am looking for an option which can give him some monthly pension or amount for his expenses. need to have secured option.
      3. Do you suggest any other type of investment where he can get monthly pay and risk is low with long term period.

      Reply
    • Mandar-He no need to pay any tax on it. However, any earning from that will be taxable income for YOU.

      Reply
      • why it will be taxable for me? i have gifted that amount to him and he is going to use the interest, right?
        if i am going to pay tax then whats the use of gifting or having FD on his name?

        Reply
        • Mandar-As per gift rules, if any income generated from the gifted amount, then it will be calculated back to the donor. However, from that generated amount anything again income generated, then it is taxed based on your father’s tax liability. If that is the case like what you feel, then no one be tax payer in India. They can gift to their wives, parents and claim ZERO tax liability 🙂

          Reply
          • got it, thanks 🙂 really helpful and eye opening information.

            Reply
  23. Hi Basu,

    Can we change the HRA declaration in 12BB later after if it is declared, because my house agreement time frame is from Jan-Dec. In this case i cant assume amount of rent increment and declare in june itself, I know from which month and not aware of how much?

    As of know I will keep the same rent in declaration & my employer allows me to change it at any day before 1st march & he will calculate accordingly and the scenarios will occur as you explained & we have to live it with that.

    Reply
    • Kiran-YES. Because it is a declaration but not final IT return. You can do the final declaration while filing IT return.

      Reply
  24. Always very good information thanks

    Reply
  25. Good job sir. Useful information, Keep it up.

    Reply

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