Amendment of Form 12BA under Income Tax Rules,1962

Last Updated On: March 23, 2021, 10:28 p.m.
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AMENDMENT OF FORM 12BA UNDER INCOME TAX RULE,1962

WHAT IS FORM 12BA?

Form 12BA is a detailed statement which shows the particulars of perquisites, other fringe benefits and profits in lieu of salary. This is issued by the employer to the employee.

Perquisites and other benefits here means :

  • Accomodation facility
  • Interest free or concessional loan
  • Free meals
  • Free education
  • Use of movable assets by employees
  • Gifts, vouchers etc

 

Who shall issue Form 12BA and by which date?

Employers issue Form 12 BA along with Form 16 (a tax deducted at source certificate) and hence follows due date applicable for issuance of form 16 i.e., 15th June of immediately following the end of the financial year.

When Form 12BA is required to be issued by the employer?

Form 12BA is required to be issued when the amount of salary is more than Rs. 1,50,000/-. Salary here means

Includes:
- Basic Pay
- Bonus
- Commission
- Allowances
- Any other monetary payment

Excludes :
- Dearness Allowance
- Exempt Allowances
- Employer contribution to PF
- Value of perquisites u/s 17(2)
- Payment which are not part of perquisites
- Superannuation
- Voluntary retirement benefits
- Commutation of pension
- Lump-sum payment for cessation of service

 

What is the use of Form 12BA?

The income from salary head consists of three parts:

- Salary/wages/pension/gratuity,

- Perquisites and

- Profits in lieu of salary

Perquisites, commonly known as perks, is the benefit that an employee gets in addition to remuneration on account of his/her job or position. There are various types of perks given by the companies / employer monetary like education expenses, driver salary, medical expenses and non-monetary benefits like rent free accommodation, stock options etc.

Income tax has set out rules for calculation of the taxable value of each perk. According to such rules, the employer deducts tax on perks. Now, looking at the complicated taxation treatment of perks, income tax rules have mandated employers to give a separate form to employees to help them understand their tax deduction alongwith Form 16.

 

AMENDMENT OF FORM 12BA:

The Income Tax Department is a government agency undertaking direct tax collection of the Government of India. It functions under the Department of Revenue of the Ministry of Finance. Income Tax Department is headed by the apex body of Central Board of Direct Taxes (CBDT). Its functions include formulation of policies, dealing with natters relating to levy and collection of direct taxes, and supervision of the functioning of the entire Income Tax Department. CBDT also proposes legislative changes in direct tax enactments and changes in rates and structure of taxation in tune with the policies of the Government.

The CBDT has amended Form No. 12BA (Statement showing particulars of perquisites, other fringe benefits or amenities and profits in lieu of salary with value thereof), Part B to Form 16 (Details of Salary Paid and any other income and tax deducted) and Annexure II to Form No. 24Q vide Notification No. 15/2021-Income Tax. Form 12BA, Form 16 and Form 24Q vide Income-tax (3rd Amendment) Rules, 2021.

Form 12BA has been revised to include additional reporting by the employer which included the details of:

Contribution by employer to recognized provident fund, pension scheme of Central Government or approved superannuation fund in respect of the assessee, to the extent it exceeds Rs 7,50,000 under section 17(2)(vii) of Income Tax Act and also annual accretion by way of interest, dividend etc. to the balance at the credit of fund and scheme;

Stock options (ESOP) allotted or transferred by an employer being an eligible start-up;

Stock options (non-qualified options) other than ESOP

Permanent Account Number of landlords shall be mandatorily furnished where the aggregate rent paid during the previous year exceeds one lakh rupees.

Permanent Account Number of lenders shall be mandatorily furnished where the housing loan, on which interest is paid, is taken from a person other than a Financial Institution or the Employer.

The Government deductors to fill information in item I of Part A if tax is paid without production of an income-tax challan and in item II of Part A if tax is paid accompanied by an income-tax challan. Non-Government deductors to fill information in item II of Part A. The deductor shall furnish the address of the Commissioner of Income-tax (TDS) having jurisdiction as regards TDS statements of the assessee.

If an assessee is employed under more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers.  Part B (Annexure) of the certificate in Form No.16 may be issued by each of the employers or the last employer at the option of the assessee. In Part A, in items I and II, in the column for tax deposited in respect of deductee, furnish total amount of tax, surcharge and health and education cess.

The Deductor shall duly fill details, where available, in item numbers 2(f) and 10(k) before furnishing of Part B (Annexure) to the employee. Part B of Form No.16 has been revised to include details as to whether the option to pay tax at lower rate for an Individuals or HUF’s u/s 115BAC is exercised or not.

Annexure II of Form 24Q has been revised in order to insert a column where the employer would be required to answer that whether the employee is opting for taxation u/s 115BAC or not.

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