Form 12BAA: Reduce TDS Deductions on Your Salary

Income Tax Income from Salary
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The CBDT recently introduced Form 12BAA, allowing employees to declare TDS and TCS from other income sources to their employers.

Here’s why it matters:
When you earn a salary, your employer deducts TDS based on your tax slab. If you’ve made tax-saving investments, you can share these details with your employer, and they’ll adjust your TDS accordingly.

Now, there are chances that you have income from other sources like interest/dividend income on which TDS was deducted. Or, you might’ve made some high value purchases on which TCS was paid.

Until now, you’d usually wait to file your ITR to claim refunds for such taxes.

Form 12BAA changes this. It lets you declare these TDS/TCS details to your employer, so they can adjust your TDS on salary accordingly. The result? A higher take-home salary and no need to wait for a refund during ITR filing.

You can provide details of TDS deducted on:

  • dividends,

  • interest on deposits & securities,

  • professional fees,

  • commission, etc

    and TCS collected on

  • international payments,

  • car purchased, etc.

:bulb: You can easily check the TDS and TCS details in your Form 26AS. Simply log in to the Income Tax portal, go to the ‘e-file’ section, and select ‘View Form 26AS.’

Finally, let’s understand the calculation using an example.

Let’s consider that you earn salary income of ₹8,25,000 per and have dividend income of ₹1L on which TDS was deducted at 10%. You can understand the computation of TDS using the following table:

Form 12BAA TDS calculation
Form 12BAA TDS calculation1072×360 31.8 KB

From the above table, you can understand how the TDS deducted from salary will be more if you do not declare the TDS on dividend in form 12BAA.

Lastly, to declare information in form 12BAA, you will need the following details:

For TDS,

  • Section under which TDS was deducted
  • Name, address and TAN of the deductor
  • Amount of income credited
  • Amount of TDS deducted
  • Other relevant details

For TCS,

  • Section under which TCS was collected
  • Name, address and TAN of collector
  • TCS amount collected
  • Other relevant details, including loss on house property

Here is the notification from the income tax department for more details.

You can post your queries regarding 12BAA or other declaration forms in the comments below.