Form 12BB (now Form 124): the declaration that reduces your salary TDS

In the new regime almost none of this reduces tax, so most employees there only confirm their regime. See the full list of deductions in our Section 80C guide.

1. April: choose your regime and submit a provisional declaration of planned rent and investments.
2. Monthly: the employer deducts TDS based on the declaration.
3. December to February: submit Form 124 with actual proofs, by the deadline your payroll team sets (often in January).
4. February and March: the employer recomputes the year’s tax and adjusts TDS in the last months. Missing proofs mean higher deductions in these months.
5. By 15 June: you receive Form 130 (formerly Form 16); see our Form 16 guide.

• Exempt HRA is the least of: HRA received; rent paid minus 10% of salary; and 50% of salary in the eight metro cities from FY 2026-27 (Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad) or 40% elsewhere. Work it out with our HRA calculator.
• Rent paid to parents is allowed if they actually own the house and declare the rent as their income. Rent to a spouse is routinely questioned.
• If the landlord has no PAN and rent exceeds ₹1 lakh, a declaration from the landlord to that effect is needed.
• Rent above ₹50,000 a month means you must also deduct 2% TDS from the rent; see our TDS on rent guide.

Nothing is lost. If proofs reach payroll too late, your employer deducts more TDS and your Form 130 shows fewer deductions. You claim them in your return, provided you are in the old regime, and the excess TDS comes back as a refund. Keep the proofs; the tax department can ask for them, and large HRA or 80C claims that do not appear in Form 130 are a common trigger for questions.

• Rent receipts for every month, or the rent agreement with bank transfers, matching the rent declared.
• Landlord PAN if annual rent is above ₹1 lakh; if the flat has two owners, both names and each one’s share.
• Home loan interest certificate for the financial year, showing interest and principal separately, and the pre-construction interest schedule if any.
• Premium receipts in your name, spouse’s or children’s, with policy numbers.
• ELSS and PPF statements showing investments made within the financial year.
• Tuition fee receipts showing the tuition component separately.
• Health insurance premium receipts, separately for parents if claimed.
• Travel tickets for LTA, in your name or your family’s, for the shortest route by the eligible mode.