Form 12B, under Rule 26A, is a crucial income tax document for salaried employees in India who switch jobs mid-fiscal year. It provides essential information about the individual’s previous employment income, helping the new employer compute the total tax liabilities accurately and avoid any tax discrepancies. The form includes details on prior salary, tax deductions, and any benefits received. While it’s not mandatory to submit a Form, doing so aids in streamlining tax deductions and ensures a smooth income tax return process for the employee.
Form 12 discloses the income earned from a previous employer. When a salaried employee joins a new organization mid-year, they can submit a Form to the new employer, allowing for accurate tax computation by combining incomes from both employers.
Employees should submit the Form as soon as possible after joining a new employer. While not legally mandatory, it simplifies tax calculations and provides clarity on income and deductions. Self-employed individuals are exempt from submitting it.
Employees are required to fill in the following details on Form 12:
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Filling Form 12 requires accurate information from the previous employment period:
Form 12B requires employees to provide details on prior salary components and deductions. Key information includes:
After receiving the Form, the new employer will consolidate the income details from the previous employer for accurate tax deductions through Form 16. The consolidated Form 16, issued at the end of the year, provides a complete breakdown of earnings and tax paid, enabling accurate tax filing by the employee.
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While both Form 12B and Form 12BA serve to inform the employer about the employee’s financial details, they are distinct:
Form 12B ensures transparency in an individual’s tax liability by consolidating income details for employees joining mid-year. Though not mandatory, submitting a Form reduces the chances of under-reporting income, ensuring accurate TDS, and avoiding tax liabilities during return filing. Both employees and employers benefit from the Form, as it supports accurate tax calculations and smooth tax compliance.
No, Form 12B is not mandatory. However, it is highly recommended for those joining a new employer mid-year to ensure proper tax deductions.
Form 12B is a statement provided by the employee to disclose previous employment income, while Form 12BA is a statement from the employer detailing non-salary income components like perquisites.
No, Form 12B is only applicable to salaried individuals who have switched employers mid-fiscal year.
You may request this information from the previous employer’s HR or finance department, as it is necessary for Form 12B.
Form 12B should ideally be submitted as soon as possible after joining the new organization to streamline the tax calculation process for both employee and employer.
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