Form 12B | Meaning and Definition

What is Form 12B?

Form 12b is an income tax form submitted by an individual while joining a new company in the middle of the financial year. The primary objective of this form is to provide details of earnings from the previous organization. In accordance with Rule 26A, every new employee needs to submit this form to their employer. Based on the information gathered from this form, the new employer issues a consolidated Form 16 at the end of the year. 

New employers can deduct the exact amount of TDS from their employees’ salaries when they submit this form, thereby reducing the chance of discrepancies. New employees, in particular, must file Form 12B along with additional proof of investments by March 31st. Nonetheless, they should file it correctly before submitting it to make the entire process go more smoothly.

Components of Form 12B

Form 12b is filled based on the previous organization’s salary slip. Here are some main components included. 

• Details of previous organizations such as PAN number, TAN number, etc. 

• Detailed breakup of previous salary structure- Basic salary, dearness allowance, leave travel allowance, House rent allowance, prerequisites, and other parts of the salary. 

• TDS deduction on the salary

• Deduction on rent-free accommodation and provident fund

• Any other Income Tax Act deduction, including Section 80C, Section 80D, Section 80E, and Section 24.