7 key points which must be known before filling Form 12BB
(Last Updated On: January 6, 2018)
Every year as a salaried employee many of you must have fill Form 12BB, but did you ever bothered to know its purpose. Don’t know ??
It is indispensable for both, you and your employer. With the help of Form 12BB, you will be able to figure out how much income tax is to be deducted from your monthly pay. Further, with the help of Form 12BB, you will be in relief at the time of filing returns as at that time you will not have to pay anything due to correct TDS deduction.
So, before filing such important form keep the below listed things in your mind so that you may live a tax hassle free life.
1. Plan your Investments well in advance:
Income tax declaration is made at the beginning of the year and their proofs are submitted at the end of the year. Generally employees tend to declare more investment at the beginning. It reduces their TDS liability considerably. Later on they do not invest properly till the end of the year. And therefore when they submit proofs, their Income tax liability increases considerably.
In that case, the employer needs to recalculate tax liability and recover the shortfall from salary of remaining months.
In fact, there are instances where the employee did not receive the salary for the last two months due to low TDS deduction at the beginning.
2. Maintain records of proofs submitted:
Always maintain a photocopy of proofs submitted to an employer as it is not possible for you to remember all the proofs submitted for a long time. Income tax department can ask for proofs at the time of scrutiny.So, it is advisable to keep all the proofs safe with you for a considerable period of time.
3. Avoid submitting fake investment proofs:
You will be responsible and accountable for wrong information. The employer is only responsible for deducting wrong TDS but he is not accountable for any fake proofs. In case your case comes under scrutiny, harsh penalty will be imposed on you for submitting fake proofs
“It is advisable to save tax with proper planning and not by fraudulent means.”
4. Submit proofs before deadline:
Always avoid last minute rush. Employees need to submit bills of various allowances to claim tax benefits. So, there is a high possibility that you tend to make mistakes in submitting proofs.It is advisable to submit the same correctly and timely so as to avoid any miscalculation in TDS deduction resulting in cash crunch.
5. If Changed Jobs during the year :
If you have changed the jobs during a particular year then do not claim the maximum benefit of all the deductions at both the places, otherwise your TDS deduction will not be correct and ultimately at the time of filing your Income Tax Return you will have to pay tax to the Income Tax Department with applicable penal interest for late payment of taxes.
6. Declare Future investment:
Every Year by January or February, employer start asking for submission of the proofs. However, there is a possibility that employee may make some more investments till the end of March.
In that case, you should submit a declaration with the employer on all such future investments to be considered by your employer. However, this needs to be done as per the policy of your company as some companies do not accept the investments after the prescribed date by the Company.
7. Declare investments beforehand :
Declare all your investments and income to your employer beforehand to avoid payment of interest u/s 234B and 234C for non-payment or short payment of taxes at the time of filing your income tax return.Further, you do not need to submit any income tax proof with your income tax return.
So, make sure you have considered all the above points before filling Form 12BB for submitting your tax declarations as it will enable you to raise your take home salary. To refer to the format click on link – Form 12BB.