Form 12BB, now Form 124: declaring rent and investments to your employer
Updated 11 October 2026
Form 12BB is the statement an employee gives the employer to claim rent (HRA), leave travel, home loan interest and deductions such as 80C, so that TDS on salary is worked out on the lower taxable salary. Under the Income-tax Rules, 2026, notified on 20 March 2026, it is now Form 124; the purpose has not changed. It matters mainly if you are in the old regime, because the new regime does not allow most of these claims.
What the form covers
| Part | What you give | Proof usually asked for |
|---|---|---|
| House rent allowance | Rent paid, landlord's name and address; landlord's PAN if the rent is over ₹1 lakh a year | Rent receipts or rent agreement |
| Leave travel concession (LTC or LTA) | Details of the journey | Tickets and boarding passes |
| Home loan interest | Interest paid, lender's name, address and PAN | Interest certificate from the lender |
| Other deductions | Amounts under 80C, 80CCC, 80CCD, 80D, 80E, 80G and similar | Premium receipts, PPF passbook, ELSS statement, tuition fee receipts, NPS statement |
The deductions have new numbers in the 2025 Act (80C is now section 123, which also takes in your own NPS contribution; 80D is 126; the extra NPS deduction and the employer's NPS contribution are 124; 80E is 129 and 80G is 133), but employers and forms still refer to the old names as well. See section 80C, section 80D and HRA exemption.
When to submit it
Most employers ask in two rounds:
- A provisional declaration in April, listing the rent you expect to pay and what you plan to invest. TDS for the year is spread over the months on this basis.
- Proofs in January or February, before the last salaries of the year. If the proofs fall short, the employer recovers the extra TDS from the remaining months.
The employer uses these figures to deduct TDS on salary (section 192 of the 1961 Act, section 392 of the 2025 Act), and they appear in your Form 16, now Form 130.
Do you need it in the new regime?
The new regime, which is the default, does not allow HRA, LTC, 80C, 80D or interest on a home you live in, so most of Form 124 does not apply. At the start of the year you tell your employer which regime you want; if you say nothing, TDS is deducted under the new regime. The employer's NPS contribution, which the new regime does allow, is handled through payroll and needs no declaration from you.
Salaried people without business income can still switch regimes when they file their return by the due date, so the choice you give your employer is not final. Compare both with the income tax calculator before you decide, and see old vs new regime.
HRA exemption worked out from his rent: ₹4,80,000
Home loan interest: ₹2,00,000
Section 80C (PPF and ELSS): ₹1,50,000
Total: ₹8,30,000. His taxable salary stays above ₹10 lakh even after these, so every rupee of the ₹8,30,000 would otherwise have been taxed at 30%. The tax saved is 30% of ₹8,30,000 = ₹2,49,000, plus 4% cess = ₹2,58,960 for the year, so his employer deducts about ₹21,580 less TDS each month. Without the form, he would get this money back only as a refund after filing his return.
Points that trip people up
- Rent to family: rent paid to a parent who owns the house can be accepted if the parent shows it as income in their own return. Rent paid to your spouse is usually questioned and often disallowed.
- LTC limits: the exemption covers only the travel fare for journeys within India, not hotels or food, and only two journeys in a block of four calendar years, with proof such as tickets and boarding passes. Government employees should also see LTC rules.
- House under construction: interest on a loan for a house that is not yet complete cannot be claimed year by year. Once construction is finished, the interest paid before completion is claimed in five equal parts from that year; for a home you live in, this counts within the ₹2,00,000 limit.
- Over-declaring in April: if you declare ₹1,50,000 of 80C investments and then invest less, the shortfall is added back and the TDS in the last two or three months jumps. Declare what you will really pay.
If you miss the deadline or a proof is rejected
Nothing is lost. Claim the deduction in your income tax return and keep the proof ready; the extra TDS comes back as a refund (see income tax refund). Keep rent receipts, the landlord's PAN, interest certificates and investment proofs for several years in case the tax department asks for them. To check how the HRA figure is worked out, use the HRA exemption calculator.