What is Form 12B ?
Form 12B is a form prescribed under Rule 26A of the Income Tax Rules, 1962, in India. It is used by a salaried employee when joining a new employer during the middle of a financial year. The form provides details of the income earned and tax deducted at source (TDS) by the previous employer. This helps the new employer compute the employee's total income for the year and deduct the appropriate TDS.
Purpose of Form 12B:
To ensure accurate computation of income and TDS by the new employer.
To provide details of income and deductions already accounted for by the previous employer.
Information Required in Form 12B:
Employee Details:
Name and address.
PAN (Permanent Account Number).
Details of Previous Employer:
Name and address of the previous employer.
TAN (Tax Deduction and Collection Account Number) of the previous employer.
Income Details:
Salary received during the financial year, including allowances and perquisites.
Deductions claimed under sections like 80C, 80D, etc.
Tax deducted at source (TDS) by the previous employer.
Submission of Form 12B:
The employee submits Form 12B to the new employer upon joining.
It is not mandatory for employees to file Form 12B with the Income Tax Department.
Importance of Form 12B:
Accurate TDS Deduction: Prevents over- or under-deduction of TDS by the new employer.
Income Reconciliation: Ensures all income earned during the financial year is consolidated.
Simplifies Tax Filing: Helps employees file accurate income tax returns.
Form 12B is a critical document for employees switching jobs during the year, as it ensures seamless tax calculation and compliance.