Investment Declaration Guide: Form 12BB Income Tax

What is Form 12BB?
 

Income tax Form 12BB is a statement of claims by an employee for deduction of tax. Salaried employees fill in the details of the investments and expenses made during a financial year. It has to be supported by essential investment documents to prove their declaration made in the form.

Usually, the Form 12BB has to be submitted during the end of a financial year. That's when you usually have the essential documents to back your declaration. The Form 12BB came into effect on 1st June 2016.¹

Apart from Form 12BB, salaried employees also have to submit a self-declaration to their employer at the start of a financial year. This declaration contains an individual's investment plans for the year. However, you may invest more or less than this declaration. To prove the final investments, Form 12BB and supporting documents have to be submitted by the end of the year, usually between December to January².
 

What declarations come under Form 12BB?¹
 

As discussed above, Form 12BB contains the investment and expense details of a salaried employee. Various sections of the Income Tax Act of 1961 provide tax benefits for these investments. So, you need to fill in the following details:

• HRA

  House rent allowance or HRA may or may not be a part of your CTC. So, before you file the form, make sure to check your salary details. If you are eligible for HRA and you live in a rented house, you can claim the same in Form 12BB. The details required are:

  • Amount paid

  • Name and address of the landlord

  • PAN of the landlord if annual rent exceeds ₹1 lakh

  • Rental agreement and rent receipts

    Note: If you are not eligible for HRA but you live in a rented home, you can claim the rent under Section 80GG of the Income Tax Act of 1961. For this claim, the rent has to be above ₹3,000. ¹

• LTA

  Leave travel allowance or LTA can be claimed if it's a part of your CTC. In a block of four years (current block: 2022-2025), you can claim LTA twice. You need to present the following documents to claim LTA:

  • Travel receipts of flight, train, bus, taxi, etc.

  • Travel agent invoices

    Note: LTA can be claimed only for your dependents and domestic travel. International trips and accommodation expenses are not covered.

• Home loan interests

  Under Section 24 of the Income Tax Act of 1961, you can claim home interest paid in a financial year. If you have borrowed a home loan for rebuilding, repairing, building, buying, or renovating your home, the home loan interest can be claimed. The documents required are:

  • Name, address, and PAN of the lender

  • Proof of interest paid

• Section 80C, 80CCC, 80CCD

  VI-A of the Income Tax Act of 1961 covers various sections like 80C (investments), 80D (health insurance), and 80G (donations). You can claim the following deductions:

  • Public provident fund

  • ELSS mutual funds

  • Life insurance policy

  • Tax-saving FDS

  • National Savings Certificate (NSC)

  • Children's tuition fees

  • Post office term deposit

  • Preventive health check-ups

  • Medical expenses (handicapped dependents)

  • Higher education loan interest

  • Section 80U for disability claim

  • Donations made.