Form 12B

As per Rule 26A, a person who joins an organization in the middle of the year must furnish Form 12B, which gives the details of income earned from the previous employer. The employee submits this form to the employer, and it requires details such as:

• Details of your previous employer, such as their PAN No. and TAN No.

• Breakup of salary, such as Basic + DA, perquisites, house rent allowance, leave encashment, leave travel allowance, etc.

• Deductions and accreditation with respect to provident fund, and details of rent-free accommodation (if any)

• Deductions, if any, under Section 80C, Section 80G, Section 80E, Section 80D, Section 24

• TDS on salary deducted by the previous employer.

• Professional tax (if any) paid by the employee

You must furnish the details in Form 12B based on the salary slip and Form 16 issued by your previous employer. You must furnish Form 12B even if your previous employer deducted no TDS because your salary was below the basic exemption limit as per the income tax slabs. After your current and previous salaries are combined, your total salary may well be chargeable to tax.

The employee verifies and signs Form 12B, and based on the details furnished, the new employer issues a consolidated Form 16 at the end of the year.

Although furnishing Form 12B and Form 16 is not mandatory under the Income Tax Act, we advise every employee to furnish these details to the new employer. Otherwise, you have to compute your taxes yourself and file your income tax return accordingly. If you furnish these details to the new employer, the new employer becomes liable to deduct TDS on the total cumulative salary received from the previous and new employers and deposit it with the Government, so you don't have to do this yourself.

How to update Form 12B in the portal

Admin level

• Navigate to Control Panel → Payroll → Form 12B.

• A new page opens, where employees who have submitted Form 12B and those who have not are listed in separate tables.

• Click the “+Add new” button on the top-right side, update the Form 12B details for the employee, and click Submit.

• Clicking Save lets the employee update/edit the details, if required, until the form is submitted.

Employee level

• Navigate to Main panel → Compensation → Investment Declaration.

• Click the “Form12B” option on the top-right side of the page. This button is visible only to employees whose date of joining is in the middle of the financial year.

• Once you click the button, Form 12B opens. Fill in all the details and click the Submit button.