Form 12BB – What is Form 12BB Means? How to fill form 12BB – Investment Declaration and Tax saving

Tax planning is important for every individual at the beginning of a financial year. In this post, we are going to discuss the significance of Form 12BB in the context of Investment Declaration and Tax Savings. Read On!

Every salaried individual plans tax in advance to help streamline the income tax deductions as per the regulations under the Income Tax Act, 1961. For most employees the TDS deductions on salary is done by the employers or the organization they work with. And it is the responsibility of the employee to submit the investment declaration in advance at the start of a financial year. This makes it easy to have the necessary assessments on income tax deductions.

If the taxable income of an employee exceeds the income tax limit even after tax exemptions, the employer deducts taxes from their salary in equal proportion on a monthly basis. This money is then remitted to the income tax department by the company. The form in which the standard investment declaration is provided is known as Form 12BB. We are going to discuss the important aspects related to the form in this post.

What is Form 12BB?

Form 12BB means a claim declaration statement  that is used by an employee for tax deduction. Employees use this form to declare the investments that they are planning during a financial year to save tax.

Investment declaration is very important for every salaried employee. However, prior to the introduction of  Form 12BB on 1 June, 2016, there was no standardized  facility to declare investments.  But, the introduction of the investment declaration form 12BB made it smooth for salaried people to reveal their tax deductions in a single form and submit it to their employer to claim tax exemptions or rebate in investments during a financial year. It also makes it easy for the employer to evaluate taxable income of the employee and to apply TDS as per the required norms.

However, it is important for the employee to know and understand the tax slab rates well to plan tax savings and investments accordingly. An employee should submit Form no 12BB at the end of a financial year and it applies to all salaried taxpayers. Hence, employees are required to keep documentary evidence of all tax planning investments to disclose at the end of a financial year.

Income Tax Slab Rates

The income tax slab rates apply to individuals/taxpayers as per the income thresholds that are defined by the government. Every taxpayer is expected to pay tax as per the income tax slab that applies depending on his/her tax liability.

Hence, taxpayers are required to evaluate tax liability depending on the tax slab and make investments accordingly in various tax saving vehicles. Once that is done, it becomes worthwhile to fill up the Form 12BB. This way a salaried individual can protect their net income.

The below list shows applicable form 12bb income tax slab rates for Individuals below the age of 60 years.

Applicable Income Tax Slab Rates for Taxpayers 60 years and below 

Author Bio

Paybima Team

Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

Choose from India’s top insurers

Latest Post

Most of you know that a car insurance policy has been mandatory by the Motor Vehicles Act, 1988. But, do you know about the benefits and features of such plans?
 

 

See nowSee now

See nowSee now

See nowSee now

See nowSee now

Owning a bike and riding it with pride is almost every youngster’s dream. But driving anything on the road means there is a risk of an accident. Bike accidents do take place everywhere, irrespective of the fact whether it was the biker’s fault or some other factor that led to the accident. It is where people who are smart enough to buy two-wheeler insurance excel in safeguarding their finances, if unfortunately an accident takes place.

The best part of a bike insurance is that you can avail the hassle-free cashless service. So, without wasting more time, let’s dig deeper to understand what is a cashless insurance for bike?

See nowSee now