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Form 12B

People often change their jobs for various reasons. If you have switched your job in the middle of the financial year, you will have to provide details of your previous salary earned along with tax deductions to the new employer through Form 12B. When you submit your Form 12B, your current employer can deduct the correct amount of TDS or Tax Deducted at Source from your salary. Every new employee has to submit Form 12B to their new employer along with proofs of all the investments made before 31st March.

Form 12B and 12BA

As mentioned above, Form 12B is required to be filled by an employee when they join a new organisation in the middle of the financial year. Form 12BA is a detailed statement showing particulars of perquisites, other fringe benefits and profits in lieu of salary.

Every designation of an employee is entitled to certain benefits known as ‘perquisites’. Perquisites or also known as perks, an employee receives on account of their job or position. Perks come in addition to the salary paid for the services rendered on a periodic basis. They can be either monetary or non-monetary. Some of the examples of perquisites are - education facility to employee’s children, interest free loan, medical facility, credit card, furnished or unfurnished house without rent, employee stock options plan, etc. The monetary amount is reimbursed by the employer for expenses incurred by employee or directly paid by employer on behalf of the employee.

What Constitutes Form 12B

Since Form 12B has to be submitted to the new employer, it should be filled based on Salary Slips issued by the previous organisation. Listed below are the few things that have to be duly filled in Form 12B.

  • Details of your previous organisation - Tax Account and Permanent Account Number.
  • Details on the complete break-up of your previous salary - Dearness allowance, house rent allowance, leave travel allowance, leave encashment, perquisites, etc.
  • TDS deduction on salary issued by the previous employer.
  • Professional Tax that is paid by the employee in case any.
  • Deduction with respect to provident fund and rent-free accommodation.
  • Deductions under other sections like 80C, 80G, 80D, 80E and Section 24, etc.

If you have joined a new company in August 2018, then you are required to submit your previous income details earned from 1st April 2018 till 31st July 2018.

What Happens after the Employee Submits Form 12B

Once the employee submits Form 12B, the new employer will issue a consolidated Form 16 at the end of the year based on the details provided by the new employee in Form 12B. It is recommended to verify the income details and TDS of both the Form 16’s issued by the past and present employers. The amount of TDS in the previous Form 16 should be same with that of the consolidated Form 16 issued by the current Employer.

Remember, it is your responsibility as an employee and not the previous employer’s responsibility to fill Form 12B. You should submit Form 12B as well as Form 16 from your previous employer.

Difference Between Form 12B and 12BA

Form 12B is required when you switch your job in the middle of the financial year with respect to details of income earned from the previous company and tax deducted at source on such income, if any. The reason is because you joined in the middle of a financial year, there has to be a correction made in terms of consolidated income earned and submission of Form 16 from both the employers is a must.

Form 12BA is a detailed statement which is issued by the employer and has the complete details on perquisites received by an employee. The employer is required to issue Form 12BA along with Form 16. Both Form 12B and 12BA come under the same master circular of Rule 26.

For Form 12BA, you can download it from the official website of the Income Tax Department of India - It is available in a pdf format which has to be printed, duly filled with all the details and then submitted to your current employer.

Applicability of Form 12BA

Form 12BA is applicable for issuance to every individual earning a salary. This is submitted along with Form 16. Your income tax details are mentioned in Form 16 while Form 12BA has details regarding the perquisites given to you by your company. Form 12BA is only an additional document to be provided specifically for perquisites.

Details on salary paid, bonuses & commission, monetary & non-monetary benefits are included in Form 12BA.

Details on dearness allowance which does not enter computation of superannuation or retirement benefits of concerned employee, employer’s contribution to provident fund, exempt allowances, value of perquisites, payments which are specifically excluded from being considered as perquisites, lump-sum payments received at the time of termination of service or superannuation or voluntary retirement such as gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and similar payments are excluded in Form 12BA.

The Income Tax Act has defined rules for calculating the correct financial value of these perquisites. The value of these payments is represented in Form 12BA and also the amount that is taxable for the individual employed for availing these perquisites. Thus, Form 12BA is an additional form that employees receive from their employer in addition to Form 16. ‘Value of Perquisites u/s17(2) of the Income Tax Act’ is already included in Part B of Form 16.

Note: Form 12BA is required to be issued even in the absence of any perquisite given to employee. This is important as an employer can mention in Form 12B that no perquisites have been given to a respective employee.

Frequently Asked Questions

What is Form 12B?

Form 12B is an income tax form that needs to be submitted according to Rule 26A by an individual joining a new organisation or company in the middle of a financial year. The main purpose of the form is to furnish details of the income earned by the individual from the previous organisation. Every new employee has to submit Form 12B to their new employer.

What is Form 12BA?

Form 12BA is a detailed statement showing particulars of perquisites, other fringe benefits and profits in lieu of salary.

What is the use of Form 12B?

The purpose of Form 12B is to ensure that individuals who have joined a new organisation or switched jobs in the middle of a financial year, have submitted the correct details regarding their TDS deductions from the previous salary earned. This, in turn, assists the new employer to generate a consolidated Form 16 with the right calculation.

Whose responsibility is it to fill Form 12B?

It is your responsibility as an employee and not the previous employer’s responsibility to fill Form 12B. You should submit Form 12B as well as Form 16 from your previous employer.

Can the current employer refuse to deduct TDS on the individual’s previous salary after the submission of Form 12B?

It is the employer’s obligation to deduct TDS on the individual’s consolidated salary after accounting for TDS deducted by the individual’s previous employer.

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