Income Tax
Returns: A to Z of New Form 12BB
This form
will act as a single entity that you can use to declare your investments and
claim tax deductions under HRA, LTA, Section 80, and interest paid on home
loans under Section 24 of the I-T Act
By Mr. Adhil
Shetty,
Since there
was no standard format required by salaried employees to disclose their
investment details to their employers, each employer had to submit proof for
each investment made in the year.
The Central
Board of Direct Taxes (CBDT) has introduced a new Form 12BB. This form, applicable
from June 1, 2016, will act as a single entity that you can use to declare your
investments and claim tax deductions under HRA, LTA, Section 80, and interest
paid on home loans under Section 24 of the I-T Act.
Possible
investment scenarios and use of Form 12BB: Since income tax declaration is just
an investment roadmap of the year, it may vary from what you actually end up
investing in.
Now, once you
give your company your declaration, you may find yourself in one of these three
possible scenarios.
Scenario 1:
You invest less than your declared sum: Based on your declaration, your
employer computed your TDS. But if your overall investments made during the
year are lower than your declaration, you may end up paying more tax with a
drop in your take-home pay in the final quarter of the financial year. You will
need to file your tax return and seek refund of any excess tax you may have
paid or that may have been deducted by your employer. With the new norms you
will need to use Form 12BB for availing any such refunds.
Scenario 2:
Your
investment matched your declaration: If you invested exactly as per your
declaration, your employer will be deducting just the right TDS from your
salary, thus eliminating chances of any tax refund issues or overpayment of
tax.
Scenario 3:
You invested more than what you declared
initially: Here, you may be eligible for further tax exemptions than initially
sought. You will then have to file your tax return and seek a tax refund if any
using Form 12BB.
Deductions
you can claim using Form 12BB: The standard Form 12BB is for all salaried
taxpayers to claim tax deductions. You use can use it to claim deductions for
leave travel allowance (LTA/LTC), house rent allowance (HRA), interest paid on
home loans, and all other tax deductions pertaining to Chapter VI-A of the I-T
Act.
House Rent
Allowance (HRA):
With form
12BB, you can claim any HRA tax deductions under Section 10 (13A) of the I-T
Act. Along with 12BB you will need to provide the relevant rent receipts for
this deduction.
You will also
need to submit the name and address of the landlord. In the event the aggregate
rent paid by you exceeds Rs 1 lakh, you will also need to submit the Permanent
Account Number (PAN) of your landlord.
 |
| Adhil Shetty, BankBazaar.com |
Leave travel
assistance (LTA){ With Form 12BB, you need to furnish amount and provide
evidence of expenses made towards your travel. Unlike in the past, it is now
mandatory to provide proof of all travel expenses in the form of receipts for
your claim.
Interest payable
on home loan under Section 24:
In the past,
if you had to seek tax deduction for interest paid for your home loan, you had
to submit an interest certificate from the concerned bank.
Now, you need
to submit the interest certificate along with Form 12BB to claim deductions
under Section 24 of the I-T act. To fill up the form 12BB correctly, make sure
you have the interest amount paid, name and address of the lending bank or
non-banking financial company (NBFC), and PAN number of the lending bank with
you.
All tax
deductions under Chapter VI-A:
All tax
deductions under Section 80C, Section 80CCC, and Section 80CCD, as well as
other sections like 80E, 80G, and 80TTA come under Chapter VI-A of the IT Act.
For deductions, fill up Form 12BB and provide details and proof of your
investments and expenditures incurred related to the relevant section you are
seeking deductions under.
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