What is Form 12BB?

What is Form 12BB?

Learn what Form 12BB is, its purpose, structure, submission process, and how it helps salaried employees reduce TDS

Written by : Knowledge Centre Team

2026-08-06

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8 minutes read

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If you work for a company, at the beginning of each financial year, you are required to declare your tax-saving investments to your employer. This declaration helps your employer calculate the correct Tax Deducted at Source (TDS), ensuring that the appropriate amount of tax is deducted from your salary throughout the year. The declaration that you make is only an estimate; you can change it during the financial year.

It is important to declare the investment, as doing so allows you to claim eligible tax deductions and exemptions, which can increase your take-home salary by reducing excess TDS deductions. The actual proof of investments and expenses needs to be submitted only towards the end of the financial year. This is where Form 124 (formerly Form 12BB) plays an important role. Based on your declaration and supporting documents, your employer computes the applicable TDS and deducts it from your monthly salary.

So, what is Form 12BB, what is Form 12BB used for, and why is it important for salaried employees? Let's find out.

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What is Form 12BB in Income Tax?

Earlier, there was no specific format for the investment declaration. The Central Board of Direct Taxes (CBDT) introduced a standardised process for investment declarations on 1st June 2016 with the introduction of Form 12BB. Under the Income Tax Act, 2025, Form 12BB has been renamed as Form 124. While the name has changed, its purpose remains the same: to help salaried employees declare eligible tax-saving investments and expenses to their employers for TDS computation.

The form applies to all salaried individuals. Whether referred to as Form 12BB or Form 124, you can declare your eligible investments and expenses in this form to claim tax deductions and exemptions through your employer. You generally need to submit the form in January or February, or within the timeline specified by your employer during the financial year. It is submitted to your employer, not the Income Tax Department, because it is used to calculate the correct amount of Tax Deducted at Source (TDS) from your salary.

Do you know

Did You Know?

The Income Tax Department's Annual Information Statement (AIS) lets taxpayers verify financial transactions before filing their income tax return
 

Source: Income Tax

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Understanding the Purpose of Form 12BB

Form 12BB (now Form 124 under the Income Tax Act, 2025) helps streamline the declaration of eligible tax-saving investments and expenses for salaried employees. It serves the following purposes:

  • Enables employees to declare eligible investments and expenses to their employer

  • Helps employees claim eligible tax deductions and exemptions while computing TDS

  • Assists employers in calculating the correct Tax Deducted at Source (TDS) from employees' salaries

  • Reduces the chances of excess or insufficient TDS deductions during the financial year

What is the Structure of Form 12BB?

The first part of the form contains your name and address. It also has your Permanent Account Number (PAN) and the financial year for which you are declaring investment. 

The second part consists of declarations as follows:

  • House Rent Allowance: If you are paying rent to your landlord, then you can use this section to claim HRA deduction. You need to provide the details below under HRA in Form 12BB of the Income Tax Act:

    1. The rent amount you paid to the landlord

    2. Name and address of the landlord

    3. PAN of the landlord(required only if the rent paid by you exceeds ₹1,00,000 during the financial year)

    4. Rent receipts/rent agreement, as proof of evidence (cash rent receipts should bear a revenue stamp)

  • Leave Travel Allowance: Leave Travel Allowance, also known as Leave Travel Concession (LTC), is given to you by your employer, which you can utilise for travel expenses. It is a kind of assistance you receive from your employer for travelling on leave. To claim an LTA exemption, you need to declare the amount being claimed and submit the relevant travel documents or proof, subject to the applicable tax rules.

Deduction of Interest on Borrowing:

The third part contains information regarding the interest on borrowings. If you are claiming a deduction for the interest paid on a home loan, you can declare it in this section of Form 12BB (Form 124). You will typically need to provide details such as:

  • Interest payable on the home loan

  • Name and address of the lender

  • PAN of the lender (where applicable)

  • A certificate from the lender specifying the interest payable for the financial year

This information helps your employer consider the eligible deduction while calculating Tax Deducted at Source (TDS).

Deduction Under Chapter VI-A:

This is the last section of the form where you include your investment made under Chapter VI A. Below is the list of a few deductions available under Section 80 of the Income Tax Act 1961:

New Section (Income Tax Act, 2025)

Earlier Section

Eligible Investment / Deduction

Section 123

Section 80C

Life insurance premiums, ELSS, PPF, NSC, children's tuition fees, and other eligible investments

Section 124

Section 80CCC

Contributions to eligible pension plans offered by insurers

Section 127

Section 80CCD

Contributions to the National Pension System (NPS)

Section 126

Section 80D

Health insurance premiums and eligible preventive health check-ups

Section 128

Section 80DD

Expenses incurred for the medical treatment and care of a dependent with a disability

Section 129

Section 80E

Interest paid on an eligible education loan

Section 134

Section 80EE

Deduction on interest paid for an eligible home loan by first-time homebuyers

Section 153

Section 80G

Donations made to eligible charitable institutions and funds

Section 154

Section 80GG

Rent paid by individuals who do not receive House Rent Allowance (HRA), subject to conditions

Section 155

Section 80GGA

Donations for approved scientific research or rural development

Section 156

Section 80GGC

Contributions made to eligible political parties or electoral trusts through permitted modes

Section 191

Section 80TTA

Deduction on interest earned from savings bank accounts, subject to the prescribed limit

Section 146

Section 80U

Deduction available to individuals with a qualifying disability

Is It Compulsory to Submit Form 12BB?

Salaried employees are generally required to submit Form No. 124 to their employer if they wish to claim eligible tax deductions and exemptions while computing TDS. However, if you don't do so, your employer may calculate TDS without considering the eligible deductions and exemptions available to you.

Important Points to Note Before Filing Form 12BB:

Before submitting Form 124 (formerly Form 12BB), keep the following important points in mind to ensure accurate tax declarations and avoid unnecessary issues during tax filing.

  • Submit accurate investment proofs: You are accountable for any incorrect data in your Form 124 (formerly Form 12BB). Ensure all your investment proofs are genuine.

    Providing incorrect or false information may result in penalties under the applicable provisions of the Income Tax Act.

  • If you changed jobs during the financial year: If you have switched jobs within a particular year, do not claim the same deductions with both employers during the same financial year.

    If you do so, your TDS calculation would not be right at the time of filing returns, and you may have to pay tax to the IT Department with interest for late tax payment.

Conclusion

Form 124 (formerly Form 12BB) simplifies the process of declaring eligible tax-saving investments and expenses, helping employers calculate the correct Tax Deducted at Source (TDS). Submitting the form accurately and on time can help you claim the deductions and exemptions you are entitled to while reducing the chances of excess TDS deductions.

To make the most of available tax benefits, plan your tax-saving investments early in the financial year and track your eligible expenses throughout the year. This helps spread your investments over time, avoids last-minute tax planning, and can reduce the likelihood of higher TDS deductions towards the end of the financial year.

Glossary

  1. Tax Deducted at Source (TDS): Tax deducted by an employer from an employee's salary before making the payment
  2. House Rent Allowance (HRA): An allowance that helps salaried employees claim tax benefits on eligible rent payments
  3. Leave Travel Allowance (LTA): A tax benefit on eligible travel expenses incurred while on leave, subject to prescribed conditions
  4. Permanent Account Number (PAN): A unique 10-character alphanumeric number issued by the Income Tax Department for tax purposes
  5. Chapter VI-A: A chapter in the Income Tax Act that provides deductions for eligible investments, insurance premiums, and specified expenses
Glossary book
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FAQs

Form 12BB, now known as Form 124 under the Income Tax Act, 2025, is a declaration form that salaried employees submit to their employers to claim eligible tax deductions and exemptions while calculating TDS.

All salaried employees who wish to claim eligible tax deductions and exemptions through their employer should submit Form 12BB (Form 124) along with the required supporting documents.

Form 124 (now called Form 12BB) is generally submitted during the financial year, usually in January or February, or as per the timeline specified by your employer for TDS computation.

The Form 124 (earlier Form 12BB) declaration includes details of HRA, Leave Travel Allowance (LTA), home loan interest, and eligible deductions under Chapter VI-A, along with the required supporting documents.

Submitting Form 12BB (now Form 124) is generally required if you want your employer to consider eligible tax deductions and exemptions while calculating TDS. Otherwise, TDS may be deducted without accounting for those claims.

You may initially declare eligible investments and expenses, but you are generally required to submit supporting documents to your employer within the prescribed timeline to claim the deductions.

If you do not submit Form 124 (earlier 12BB), your employer may calculate TDS without considering your eligible deductions and exemptions. However, you can still claim eligible deductions while filing your income tax return, subject to the applicable provisions.

No. Form 124 (previously called 12BB) is submitted only to your employer for TDS purposes. It is not required while filing your income tax return, although you should retain the supporting documents for your records.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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