About Form 12B:
- Generally you fill out a form 12BB when you start a new job or in the beginning of the financial
- year. However, at the year end you are supposed to submit the actual proofs/evidences against the tax exemptions ,investments and expenses already claimed by you in the form 12BB.
Information are required to be filled in Form 12BB:
The details required to be reported in Form 12BB are:
- Your Personal Details
- Name, Address, PAN Number , Position , Father’s Name
- Financial Year – Current Financial year is F.Y. 2017-18HRA : House Rent Allowance
- Leave travel concessions or assistance
- Interest on home loan
- Income Tax Deductions under Chapter VI-A of Income Tax
- Other Details like Date, Place etc
How to fill Form 12BB
Personal Details :
This is the first section of Form 12BB, you need to mention your :
- Full Name
- Address
- Permanent Account Number
- Financial year
HRA tax exemption:
you need to submit the following details to your employer –
- Amount of Rent paid
- Name of your landlord
- Address of your landlord
- PAN No of your landlord in case the total amount of rent paid during the year exceeds Rs.1 lakh
Evidence/Proof for claiming House Rent Allowance tax exemption:
The proof for claiming HRA tax exemption are the monthly rent receipts. In many organisations, employer also ask for the rent agreement for allowing HRA tax exemption.
Things to remember when claiming HRA tax exemption :
- You can claim HRA tax exemption only when HRA is a part of your CTC.
In case, HRA is not a part of your CTC and you are living in a rented house you can claim tax benefit under section 80GG. - Rent receipt is required only when your monthly rent exceeds Rs. 3,000.
- You can’t claim HRA if you are living in your own house.
- If you are paying rent to your parents, then ask them to show it as their income at the time of filing their Income Tax Return.
- Never submit fake rent receipts, this might land you in big trouble with the income tax authorities.
- Even if your employer do not ask for rent agreement, it is advisable to have a formal rent agreement printed on Rs. 500 stamp paper or as per the rate prevailing in your state for records.
LTA(Leave Travel Concession/Allowance):
Evidence/Proof for claiming LTA tax exemption:
To claim LTA, employees need to submit travel bills like boarding passes, flight tickets, invoice of travel agent, boarding pass etc. to employer.
Amount of tax saving on LTA :
This tax exemption is allowed only on actual travel cost to the extend specified in CTC. The fare is exempt as per the following conditions:
| Particulars | Exempt Amount |
|---|---|
| Air | Air fare of economy class in the National Carrier by the shortest route or the amount spent, whichever is less |
| Rail | Air-conditioned first class rail fare by the shortest route or the amount spent, whichever is less |
| Bus | First Class or deluxe class fare by the shortest route or the amount spent, whichever is less |
| Unrecognised public transport system | Air conditioned first class rail fare by shortest route or the amount spent, whichever is less |
Things to remember when claiming LTA tax exemption :
- You can claim LTA only when it is a part of your CTC.
- You can claim LTA for yourself, your spouse, children, dependent parents and dependent brother and sister.
- It can be claimed twice in a block of four years. The current block is 2020-2023.
- If you have claimed only 1 LTA in the previous block of 4 years, you can carry forward and utilise the 2nd LTA but have to claim it in the first year itself of the next block.
- It is allowed for domestic travels and not for international travels.
Deduction of Interest on Borrowing :
Deduction of interest on borrowings on home loan is allowed under section 24 of the income tax laws. You can claim deduction for interest on your home loan taken for construction, reconstruction, repair, purchase or renovation.
The information needs to be filled in the Form 12BB are:
- Interest Payable/paid to the lender during the financial year
- Name of the lender from whom loan is taken
- Address of the lender
- PAN of the lender: Financial Institutions/Employer/Others, from whoever the loan is taken
Evidence/Proof for Claiming tax exemption for interest on borrowing:
Documents required to claim deduction u/s 24B on interest payment of home loan are:
- Statement / Certificate stating total EMI paid along with Interest and Principal components.
- Possession/construction completion certificate
- Self-declaration from employee whether house is self occupied or let out.
Deductions under Chapter VI-A
Chapter VI-A covers income tax deduction under various sections like 80C, 80D (Medical insurance) 80G (Donation) etc. To claim deduction, evidence of investment made or expenditure incurred is required..
