Revision of Form 12BA under Income Tax Act, 1962

What does Form 12BA mean to taxpayers?

The taxpayers who don’t know about Form 12BA must be aware that Form 12BA is a meticulous statement that exhibits you the specific prerequisites and other fringe significances in lieu of salary. The Form 12BA is usually a form that the employers issues to its employees.

What do Prerequisites and other significance mean in Form 12BA?

Accommodation benefits
Interest-free loans
Free meals to employees
Free educations
Utility of movable assets by the employees
Gifts, vouchers, etc.

Who issues the Form 12BA, and by which date?

Usually, Form 12BA is a form that the employer issues to its employees. This is the form that comes along with Form 16. Thus, as it comes with Form 16, and the date for issuance of form 16 is 15th in June immediately after the end of the financial year, the employers also issue Form 12BA on the same date.

When is it necessary for the employer to issue Form 12BA?

When an employer pays salaries above INR 1 60,000 to any of its employees, in such cases, they need to issue Form 12BA. The salary in Form 12ABA includes the following:
Basic pay
Any other type of monetary payment

Further, Form 16BA excludes the following data:
Dearness allowances
Exemption allowances
The contribution of the employer to PF
Value of all the prerequisites under section 17(2)
The payments that are not a portion of prerequisites
Benefits pertaining to voluntary retirement
Pension commutation
Lump-sum payment for service cessation

Use of Form 12BA

The income that you get from your salary segments into three sections. It includes the following:
Salary/ wages/ gratuity/ pension
Profit instead of salary

The other name to prerequisites is perks. These are the benefits that the employees get after having their remuneration to the account. The perks that the employees get are of several types. Some are the monetary benefits; besides the monetary benefits, the employees get educational benefits that include expense bearing. Further, employees also get a driver’s salary, medical expenses, rent-free accommodation, stock options, and many more.
But as per the Income Tax regime, there are specific rules that the income tax department introduced for the taxable value of each benefit that an employee gets. As per these rules by the Income Tax department, the employer has to deduct the taxes on every benefit they offer.
Now when you look at these tedious tax treatments for every benefit, onemore thing that you will find is the income tax rules ask the employers to issue a mandatory separate form to all their employees. This form helps the employees understand everything about their tax deductions for every benefit that they get.

The amendment to the Form 12BA

The income tax department is a government body that ensures the direct tax collections of the India Government. This is a specialized body that functions under the department of revenue of the ministry of finance. Further, the apex body of central government CBDT heads this department. The operations of the income tax department include several things. Some of these operations are the formulation of policies, handling matters pertaining to the levy, and accumulating direct taxes. Some other functions also include supervision and functioning of the complete income tax department.

There is one more thing that the CBDT ensures. It is the proposal for legislative changes in the previously made direct tax enactments. The changes may include the changes in rate and taxation structure that matches with the new government policies.

Similarly, the CBDT recently has amended Form 12BA. These amendments clearly show specific prerequisites and other fringe benefits that profit with the lieu of the salary. Along with the amendments to Form 12BA, the changes are also found in B of form 16. This part contains the details about the salary paid along with the income tax deductions of the employees.

The form 12BA undergoes a clear revision to include some of the additional reporting. The additional reporting includes details such as the employer’s contribution to the provident fund. Pension scheme introduced by the central government, approved superannuation fund, and the annual accretion by way of interest/ dividend to the balance of credit fund.

The amendment will also include the detail about the stock options transferred/ allotted by an employer. There are some other things that the amendment clears. It says that the permanent account number or the PAN number of all the landowners must be compulsorily mentioned in the form, if the total rent paid in the previous year exceeds one lakh rupees.

Further, the PAN numbers of all the leaders in the form 12BA should also get furnished if the interest on the housing loan gets paid. If the loan is from any person, then only the PAN number is necessary.

All the government deductor must furnish the information in item I of part A. However, if you pay taxes without the generation of the income tax challan, in such cases, you need to fill the item II of part A.

All assessee getting employed by more than one employer needs to issue the Part A of the certificate in form 16. Part B may get issued by the last employer.
Further, the deductor must necessarily fill in all the necessary details. After filling in the details, you can also have a revision to ensure all the details are complete.
Annexure-II of Form 24Q gets reviewed in command to add a column where the owner would compulsorily answer that whether the operative is opting for taxation u/s 115BAC or not.

Important: Please note that the information on this page / site is provided as general information for better understanding for the user and does not constitute tax, legal, or other professional advice and must not be used as such. Please consult your professional adviser(s) if you have any questions / doubts regarding the above.

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