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Form 12BB: For Salaried Employees to claim Income Tax Exemption


Form 12BB, every employee has to submit self-declaration to his employer at the starting month of the year say for the financial year 2017-18, they have to submit their declaration during the month of April 2017, in which an employee gives estimated figures to claim their investments, house rent paid, interest on home loan, leave travel allowances etc. to his employers. after submitting the declaration, the employer calculates his estimated taxable salary after allowing deduction and their savings, TDS will be deducted every month from his salary. At the end of the year, the employee should submit form 12BB along with their proofs, against the declaration previously made by him. The proof amount can be lower or higher from the declaration given by employee. Then employer calculate his actual amount of income tax and deduct the balance amount of income tax in the last month, the employee can claim the following deductions in form 12BB as under-

House Rent Allowance- exemption under section 10(13A) is allowed if he is getting House Rent Allowance as part of salary and full fill below two conditions-
  1. He has taken a residential accommodation in which he resides on rent.
  2. He has not occupied such property in which he resides.
HRA Exemption can be claimed whichever is lower on the following basis: -
  • Actual HRA Received
  • Rent paid minus 10% of Salary
  • 40% of salary if he resides in Non-Metro City or 50% of salary if resides in Metro City.

To claim deduction of HRA, the employee has to provide house rent paid receipts, if the rent paid during the year exceeds Rs. 1,00,000, then he has to submit the PAN of the landlord.

How to calculate HRA : Use HRA exemption calculator-
Leave Travel Allowance- is given to employee by his employer to cover his travelling expenses when he goes on vacations. Exemption is available for travel to an employee alone or with his family. Family includes his spouse, children, dependent father or mother, dependent brother or sister. Children include not more than two children whether adopted or step child. LTA can be claimed when an employee submits actual bills of travelling to his employer. Exemption of LTA is allowed for travelling in India only not cover out of India. Food expenses or shopping expenses are not allowed under LTA exemption.
Deductions under Section 80C to 80E- the some of the following deductions which are mainly applicable to employees, are covered under chapter VI-A-
  • 80C, 80CCC, 80CCD (1)- Investment made in any schemes covered u/s 80C of income tax act.
  • 80CCD(1b)- deduction in respect of contribution to NPS.
  • 80D- deduction in respect of Mediclaim Policy.
  • 80DD-deduction in respect of medical treatment of physically disabled dependent relative.
  • 80DDB-deduction in respect of medical treatment of specified diseases for self or dependent relative.
  • 80E- deduction in respect of interest paid on higher education loan.
  • 80G- deduction in respect of donation made to any specified institutions.
  • 80GG-deduction in respect of rent paid, in case HRA is not part of salary.
  • 80TTA- deduction in respect of interest on saving account.
  • 80U- deduction in respect of person suffering from any physical disability.
Interest on Home Loan- the deduction under section 24 (b) of income tax act for Interest taken on Home Loan, if he is not residing in purchased property. The deduction under section 24(B) is as follow: -
  • In Case of Self occupied Property: -     Deduction for Interest is allowed Maximum of Rs. 2,00,000 in a financial year.
  • In Case of Let out Property: -     Deduction for Interest, there is no Maximum limit in a financial year

In life everyone has their own dreams, whether it about cars, houses or their career. Most people I know dream to have the biggest and luxurious house. So can we fulfill our dream to purchase/construct a new house and also claim the deductions for Interest paid on Home Loan along with Principal repayment under Income Tax Act.

Regarding claim of House Rent Allowance along with Deduction of Interest on Home Loan:

  1. An Assessee can claim House Rent Allowance in respect of rent paid for residential accommodation occupied by him if HRA received is a part of salary. It can be exempted under section 10 (13A).
  2. He can also claim deduction for Interest taken on Home Loan, if he is not residing in his purchased property. This claim comes under section 24 (b) of Income from House Property.

Even he can claim deduction under section 80C for repayment of home loan.

Non-declaration of form 12BB on Time-

Every employee has to submit form 12BB, along with relevant documents should be deposited on time period framed by your employer, if it is not submitted on time, the TDS will be higher deducted, you have to claim refund against excess TDS amount. So, it is advisable to you that always submit their investment proofs or payment receipts on time to avoid any excess amount of TDS deduction.


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