Investment Declaration 2024: Here's How An Employee Can Declare Investments And Use Form 12BB

As the current financial year 2023-24 (FY24) nears its end in March, employees across organizations will need to provide evidence of their investments to their companies to manage finances better and claim tax benefits. As a salaried individual, you're likely familiar with the process of having a portion of your salary deducted for Income Tax, commonly known as Tax Deducted at Source (TDS), which is then remitted to the government. To ensure accurate computation of TDS, your employer typically requires you to submit details of your tax-saving instruments and deductions. This submission is made through an investment declaration, a self-declaration form outlining your estimated tax liability for the upcoming financial year, commonly referred to as the tax season. This declaration serves as a proactive measure to facilitate proper tax planning and compliance, ensuring that the appropriate amount of TDS is deducted from your salary. The reason why employers request this information is to ascertain their employees' correct tax liability.

Avinash Polepally, senior director, ClearTax said, “Employees have to submit a declaration of deductions and exemptions that they want to claim. The employer will deduct TDS from the employee’s salary on the basis of these declarations. These investments are generally required to be made on the employer’s HR portal.”

Also Read: Attention Taxpayers! Reconcile ITR Mismatch Before This Date; Here’s How To Respond to e-Verification Notice

List of Investment Proofs Eligible for Tax Deduction:

• Deduction Section 80C

• Life insurance premium slips( in the name of self/spouse/children), passbook copy of public provident fund (PPF), home loan statement reflecting principal amount, mutual fund statement for tax saver mutual funds, kid's tuition fee receipts, national savings certificate (NSC) certificate, tax saving fixed deposit (FD) receipt, Sukanya Samriddhi account passbook, etc.

• Section 80CCD1(B)

• Proof of investment made in NPS by self. Bank statements or NPS statements.

• Section 80D

• Copy of medical insurance premium receipt, health- checkup receipts

• Section 24

• Home loan statement, self-declaration, whether the house is self-occupied or let-out, submit completion certificate or occupancy certificate for claiming interest paid on housing loan.

• Housing Rent Allowance (HRA).

• Monthly rent receipts & rental agreement. In case the annual rent paid is more than Rs 1 Lakh, the landlord's PAN should be quoted.

• Section 80 G

• Receipts of donations

• Section 80 E

• Copy of loan certificate reflecting the interest payments

• Leave Travel Allowance

• Travel tickets. LTA can be claimed twice in a block of four years.

• Medical reimbursement

• Original medical bills with doctor's prescription(s) copies, if available.

Procedure For Investment Declaration Under The New Tax Regime:

Form 12BB is a statement of investments, deductions, and other tax-related claims made by an employee to their employer. It is used to provide details of investments and expenses for which the employee seeks tax benefits or exemptions. It is to be submitted at the end of the financial year.

Here's how an employee can declare their investments using Form 12BB:

Obtain Form 12BB: The employee can obtain Form 12BB from their employer or from the Income Tax Department's official website.

Fill Out Personal Details: The employee should fill out personal details such as their name, Permanent Account Number (PAN), employer's name, employer's PAN, and financial year for which the declaration is being made.

Declare Investments and Expenses: In Form 12BB, the employee needs to provide details of investments, payments, and expenditures eligible for tax deductions or exemptions under various sections of the Income Tax Act. This includes:

• Investments under Section 80C (such as PPF, NSC, ELSS, life insurance premiums, tax saver FDs, etc.) Investments in specified schemes under Section 80D, 80E, 80G, etc.

• House rent allowance (HRA) received and rent paid (if claiming HRA exemption).

• Interest paid on home loan (if claiming deduction under Section 24).

• Any other allowances, benefits, or perquisites received from the employer.

• Attach Supporting Documents: Along with Form 12BB, the employee should attach supporting documents such as investment proofs, rent receipts, loan statements, etc., for verification by the employer.

Attach Supporting Documents: Along with Form 12BB, the employee should attach supporting documents such as investment proofs, rent receipts, loan statements, etc., for verification by the employer.

Submit To Employer: After filling out the form and attaching supporting documents, the employee should submit Form 12BB to their employer within the specified deadline. This is usually done at the end of the financial year or as per the employer's instructions.