Know about Form 12B and Form 12BA in simple terms. Understand the difference between these income tax forms and their importance for accurate tax calculations.
Income tax forms can be confusing, especially for those who are new to the workforce or switching jobs. Two essential forms for employees and employers are Form 12B and Form 12BA.
These are two important documents in income tax filing. While they are related to salary income, they serve different purposes and are used in different situations.
What is Form 12B?
Form 12B is a document that contains information about the income and tax deducted from a previous employer.
It’s mandatory for employees who have changed jobs during the financial year to submit it to their new employer.
This form helps the new employer calculate the correct tax liability and deduct the appropriate amount of tax from the salary.
The following details are required to be filled in Form 12B:
- Address and name of the employee and their Permanent Account Number and Aadhaar Number
- Residential status of the employee
- Name and address of the previous employer(s) and their TAN and PAN or Aadhaar Number
- Period of employment with each employer
- Particulars of salary as defined under section 17
- Amount deducted in respect of life insurance premium, provident fund contribution, etc., to which section 80C applies
- Total amount of tax deducted during the year by each employer
- Particulars of the value of perquisites and amount of accretion to the employee’s provident fund account
What is Form 12BA?
Form 12BA is a document provided by your employer at the year’s end. It outlines additional benefits like company housing, vehicle allowances, or other perks you received during the year. This information is crucial for determining your total income and tax obligations.
This document complements Form 16, which summarizes your tax computations. Form 12BA provides specific details about the value of perks, helping you accurately calculate your tax liability.
The following details are required to be filled in Form 12BA:
- Details of the employer
- Details of the employee
- Details of salary paid and any other income reported by the employee
- Details of rent-free accommodation, motor car, or any other movable asset provided to the employee
- Other relevant details as required
Why are Form 12B and Form 12BA Important?
Both forms are crucial for accurate income tax calculations. Form 12B helps your new employer determine the correct tax deductions.
While Form 12BA gives you a clear picture of your total income and tax liabilities. Having these documents handy is essential for filing your income tax return correctly.
Key differences between Form 12B and Form 12BA:
- Form 12B is submitted by the employee to the new employer, while Form 12BA is issued by the employer to the employee.
- Form 12B provides details of previous salary and tax deducted, while Form 12BA reports the value of perquisites and benefits.
- Form 12B is used when an employee changes jobs, while Form 12BA is used annually to report perquisites and benefits.
Both are crucial documents in income tax filing. Understanding their purpose and usage can help employees and employers comply with tax regulations and avoid penalties.
By submitting Form 12B and issuing Form 12BA, individuals can ensure accurate reporting of their salary income and perquisites, making tax filing a smoother process.