What is Form 12B and Its Different Parts?

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When joining a new organization in the middle of a fiscal year, employees need to fill out Form 12B. This form informs the new employer about key income details of the employee from the previous employment. In this post, let us learn more about the 12B Form and its main features.

What is Form 12B?

Form 12B is an income tax form that discloses information about the individual’s income from their earlier employment/organization. This form must be furnished as per rule 26A of the Income Tax Act by the employee at the time of joining a new company in the middle of a financial year. The details in Form 12B include salary earned in the previous organization, TDS for the fiscal year, any perquisites, etc. Form 12B, thus, helps the new employer to deduct applicable TDS from the salary of the new employee for the remaining financial year. Further, the employee must also provide their investment proof (if any) for the financial year before 31st March of the FY. So, Form 12B concerns only the salaried employees in case they switch jobs in the middle of an FY.

Different Contents of Form 12B?

As discussed, Form 12B discloses the income information of an employee at their previous organization when the person joins a new company in the middle of an FY. The form is submitted to the new employer, and it contains the following details:

  • Information regarding the previous organization, including TAN, PAN, etc.
  • Salary break-up of the previous company such as basic salary + dearness allowance (DA), house rent allowance (HRA), commissions, leave travel allowance (LTA), leave encashment, etc.
  • Deductions made toward the Provident Fund (PF) in the previous organization
  • Any deductions as per Section 80C, 80D, 80E, 80G, and section 24, etc.
  • Professional Tax paid by the employee (if any)
  • Earned income before joining the new company in the FY
  • TDS deductions (already done), etc.

Why is Form 12B Important?

Form 12B is important to both the new employer and the employee. It is important for the employees because they must submit Form 12B details and other information about their investment for the financial year before March 31st for deductions of TDS or Tax Deducted at Source. The employees are expected to file the details accurately to make the submission process quick and smooth.

On the other hand, Form 12B is important for employers because it contains details of the prior deductions and salary of the new employee, which is needed by the new employer to ensure further deductions during the year. Hence, form 12B is required for smooth and accurate deduction of TDS from the gross annual income of the new employee.

Details/Documents Required for Filling Form 12B

Below are the details required to be filled in Form 12B:

  • Name of employee
  • PAN and TAN of the previous employer
  • A statement/declaration by the employee with their name, date, place, and signature, along with the information offered in Form 12B
  • Amount of rent-free accommodation offered by the employer. It also contains different columns to provide furnished and unfurnished house/apartment
  • Rent paid by employees (if any)

How to Fill Form 12B?

Form 12B Format features a form on the first page and annexures that the employee is required to fill out on the next page. The form generally contains 2 annexure pages beside the first page of the form.

Details on the provision of rent-free accommodation by the employer are required to be filled out in the first annexure, including information on both furnished and unfurnished apartments. On the other hand, information from the earlier employer, conveyance allowance, incentives, etc., are part of the next annexure.

Form 12B consists of the below fields that need to be filled by an employee: 

  • Name of the previous company as well as the address
  • Employment duration
  • PAN or the Permanent Account Number and TAN or the Tax Deduction Account Number of the earlier employer should be submitted
  • Professional Tax paid by the employee (if any)
  • Paid perquisites such as conveyance offered by the employer (if any)
  • Wage offered by the employer to the employee for personal services
  • Concessional travel allowance value
  • Income earned in the fiscal year before joining the new organization
  • Salary break-up of the previous company such as basic salary + dearness allowance (DA), house rent allowance (HRA), commissions, leave travel allowance (LTA), leave encashment, etc.
  • Deductions made toward the Provident Fund (PF) in the previous organization
  • Any deductions as per Section 80C, 80D, 80E, 80G, and section24, etc.
  • Value of any other perquisites paid
  • Over and above contribution to EPF by an employer beyond 10% of employee salary., etc.

When and to Whom is Form 12B Required to be Submitted?

All employees (salaried) should fill out Form 12B and submit it to their new employer if they switch jobs in the middle of a financial year.

Here, you may note that employees who were self-employed before taking up a salaried job do not need to submit Form 12B. So, this form applies to salaried employees only who change jobs to take up new employment opportunities during a fiscal year.

This helps the new employer calculate the new employee’s salary and accordingly deduct the applicable amount. However, you should also note that the previous employer may or may not offer their details to the new employer as they are not obliged to do so. Hence, in such cases, the employee may find the details from their payslips.

What Happens When Form 12B is Submitted?

The new employer uses the accurate information offered by the new employee to the new employer in Form 12B to issue Form 16 in a consolidated format at the end of the financial year. The employee needs to verify the details available in Form 16 issued by the old as well as the new employer. There should be no discrepancy in Form 16, which might cause hassle in any tax-related issues later.

Form 12B vs Form 12BA – Key Differences

Irrespective of the fact that Form 12B and Form 12BA are both issued as per Rule 26A of the IT Act. But you may note that they serve different functions. Below is the key distinction between the two forms:

  • A salaried employee who switches jobs to move to a new company in the middle of a financial year must submit a completed Form 12B to the new employer. The form contains details on salary income, TDS deductions, and other details that the new employer should know. On the other hand, Form 12BA offers a complete breakdown of the non-salary income of the employee, including perquisites, profits, etc.
  • Form 12B is a declaration made by the employee to the new employer in the event of getting hired by the new employer during a fiscal year. On the other hand, Form 12BA is a statement of benefits offered by employers to employees.

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FAQs: What is Form 12B?

Who should fill out Form 12B?

Form 12B should be filled out by the employees. The employee must fill out Form 12B declaration as well as attach Form 16 (if offered by the previous employer)

Can the new employer deny deducting TDS from employees' earlier salary after he/she submits Form 12B?

The new employer is responsible for deducting TDS from employees' consolidated salary after calculating the TDS deducted by the earlier employer.

What is the next step after Form 12B is submitted?

The employer may provide Form 16 to the employee after Form 12B is submitted per the details provided on Form 12B.

What is Form 12BA?

Form 12BA is an income tax form that is like a declaration by the employee on their profits, perquisites, and other benefits offered by the previous employer.

How to download Form 12B?

Form 12B download can be done from the official website of the Income Tax Department, among others.

What is Form 12bb?

It is an income tax form that is used by employees in India to declare investments and expenses they have made during the year, which makes them eligible for tax deductions. Hence, it is a claims statement declared by an employee for tax deduction u/s 192 of the IT Act.

Which Form is used for Income tax declaration for salaried employees?

Form 12BB is used to declare investments done by an employee during the year.

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Feb 09, 2024
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