Salaried Individuals will have to furnish the details in a new form – Form 12BB. The form will be used to give details of the deductions for which the employees are eligible under various provision of Income Tax Laws. Under the new rule, employees will need to give proof of claims and tax saving investments to their employers through Form 12 BB. Though, salaried professionals disclose the details of their investments since always, the Income tax department has now made the process simple by putting a standard form in the place which will help in documentation for employees as well as employers.
On the basis of Form 12 BB employers will deduct the TDS and pay monthly salary. It is a change from the previous format as the companies used to give their own standard format to the employers wherein employees need to fill all the details and necessary information. Employees should make sure that they have all the proofs required for claiming the deduction and while filling the Form 12BB, these proofs should also be attached in order to make sure that no claim has been left out. In case the employee provides the false claims or incorrect information, it can be rejected and tax deduction will be done of the actual amount.
- It has also become mandatory to provide proof of travel for claiming tax deductions on LTA/LTC (leave travel allowance/concession)
- Employees are also required to provide evidence for claiming House rent allowance if it is in excess of Rs 1 lakh in an assessment year.
- Details to be submitted in such case id Name, address and PAN of landlord and tax authorities will verify all the details.
- Tax authorities will make sure that the rent received by landlord has been disclosed in his/her income tax return.
- The employee needs to furnish the lender’s details in order to claim deduction of interest on home loan.
- Employee can claim deduction on Rs1.5 lakhs from the total taxable income if invested /spent in PPF, employee’s PF contribution to PF, life insurance premium paid, tuition fee, principal repayment of home loan, Sukanya Samridhi Account and so on as per section 80c
- Under section 80 E one can apply for deduction of interest on loan taken for higher education.
- If you are a first time home owner then you can avail deduction on home loan interest of Rs. 50,000 over and above Rs 2 lakh as per section 80EE if the value of the purchased property is under Rs.50 lakhs and home loan is under Rs 35 lakh.
In short the new form is going to be a standard format if an employee want to claim deductions on:
- LTA (Leave Travel Allowance) / LTC (Leave Travel Concession)
- HRA (House Rent Allowance)
- Interest payable on Home Loan (Section 24) and
- All Tax Deductions under Chapter VI-A which relates to allowable deductions under various sections including Section 80C, Section 80CCC Section 80CCD, Section 80D etc.,