What is Form 12B? Fundamentally, it is an income tax form that is submitted as per the guidelines of Rule 26A. It is usually submitted by an individual who has joined a new company in the middle of a fiscal year. The primary objective is to provide details of the earnings generated by an individual from his/her previous organisation. One must note that a new employee is required to submit Form 12B to the new employer. Furthermore, it is the responsibility of the new employer to provide Form 12B to the new employee. However, one can initiate Form 12B download online and subsequently fill and submit it along with Form 16 to the new employer. However, furnishing Form 12B may not be compulsory in all cases. Components of Form 12B: It must be noted that the Form has to be filled on the basis of salary slips that were issued by previous organisations. Here is a list of information that is included in this Form. The primary components of Form 12B of Income Tax are given below – Details of the previous organisation like TAN and PAN. Details providing an accurate breakup of the previous salary including – dearness allowance, leave travel allowance, house rent allowance, perquisites, etc. TDS deductions made on salary by the previous employer. Professional tax is paid by employees in any given situation. Applicable deductions under Section – 24(b), 80C, 80D, 80E, etc. Deductions on rent-free accommodation and provident fund. Notably, if an individual joined a new company in August 2018, then he/she has to submit previous income details pertaining to 1st April 2018 to July 2018. Importance of Form 12B: The primary significance of Form 12B for both the new employer and the employee are discussed below – For employers It comes handy for the new employer as it contains details related to the new employee’s previous salary and deduction. In turn, it helps employers to generate Form 16 with correct information. For employee When they submit this Form, new employers can deduct the precise amount of TDS from their salary and thus minimize the risk of discrepancies. Notably, new employees have to submit Form 12B along with other proof of investments before 31st March. Nonetheless, before submitting it, they should file it accurately to complete the entire process in a less cumbersome way.
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