Understanding Form 12B: Salary Declaration and Tax Implications for Employees

Can anybody tell me how to fill out Form 12B and where I can find the rules mentioned in it?

Thanks in advance.

The new employee should give his declaration of earnings in previous employment in Form 12B. In this case, the salary should be what he earned after deduction U/s 10. He should also declare PF, income tax, professional tax if any deducted by his previous employer in Form 12B. For filing Form 12B, Form 16 issued by the previous employer would be helpful.

For example, if you have joined the new organization on 1st August 2008, then you have to give the details of your income earned from 1st April 2008 till 31st July 2008.

Change of Employment: Form 12B

Q-12: For an employee joining in the middle of a FY, is it the responsibility of employer to ask for salary details of previous employment? In other words, is it mandatory for the current employer to deduct TDS on salary income received from previous employer? Can the employer force the employee to submit the information for TDS purpose? Or, is it at the total discretion of the employee? Can the current employer adjust if there any shortfall or excess TDS deducted by previous employer?Ans: According to section 192, it is the option / discretion of the employee whether or not to file Form No 12B. The current employer can’t insist on filing of Form No 12B. If the employee chooses not to file, then employers’ obligation is limited to compute TDS on salary payable by him.

If Form 12B is filed, then current employer can deduct the TDS on salary paid by previous employer (in case no TDS was deducted by previous employer). And if the TDS was deducted by previous employer, any excess or shortfall can also be adjusted.

It is always in the interest of an employee to furnish such details because otherwise there can be duplication of exemptions and deductions and there can be a shortfall in tax deduction and as a result the employee would become liable to deposit advance tax.

Q-13: Who’s responsible for filling up the Form 12B: My previous employer or me?Ans: It is the responsibility of the employee to fill the declaration in Form No 12B and also attach Form 16, if any, issued by your previous employer. It is required to be filled up even if there was no TDS deducted by your previous employer due to the salary being less than the basic exemption limit. It is quite possible that after combining your current and previous salary, your total salary income exceeds the maximum amount not chargeable to tax.

Q-14: How to fill Form No. 12B for giving it to my current employer so that income (and tax already deducted thereon, if any) from my previous employment can be considered for the purpose of TDS from my current salary income?Ans: Fill up Form 12B based on the Form 16 (if TDS deducted) or on the basis of salary certificate (if no TDS deducted or pending issuance of form 16) issued by your previous employer. You can also take the help of your salary slips. In case of any difficulty, you can take guidance from your previous or current employer.

Q-15: Can my current employer still refuse to deduct TDS on my previous salary once I submit Form 12B?Ans: No, once you submit Form 12B, it becomes the obligation of the employer to deduct TDS on your consolidated salary after accounting for TDS deducted (if any) by your previous employer.

Regards
Gurwin

Hi,

I need help to sort out two issues:

(1) I have changed companies and need to fill out Form 12B from my salary slips. I need to confirm what the values should be for columns 6, 7, and 8:
Column 6: Total amount of salary excluding amounts required to be shown in columns 7 & 8
Column 7: Total amount of house rent allowance, conveyance allowance, and other allowances to the extent chargeable to tax [see section 10(13A) read with rule 2A and section 10(14)]
Column 8: Value of perquisites and amount of accretion to the employee's provident fund account (provide details in the annexure).

(2) Also, my last salary has been deducted by the employer as I left the job in six months, breaking the one-year service contract. Due to this, the transportation expense and traveling expenses nullify my last salary. Am I liable to pay the TDS for that as well?

Thanks