“What is Form 12BA of Income Tax?”, Structure and Applicability of Form 12BA

Introduction

The laws governing income tax have established guidelines for the assessment of certain perquisites. Additionally, because Form 16 only contains a consolidated account of the pay and benefits an employee receives from their employer, income tax regulations mandate the issuance of separate statements outlining all of the individual’s perquisites. This declaration must be provided in Form Number 12BA. This article focuses on “What is Form 12BA of Income Tax?”, Applicability of Form 12BA, Structure of Form 12BA of Income Tax Act, and FAQs on Form 12BA.

What is Form 12BA of Income Tax?

An income-tax statement called Form 12BA lists the specifics of requirements, amenities given by the employer, profits in lieu of compensation, and other fringe perks. The value of the payments and the taxable sum that the beneficiary owes to the Central Government are both highlighted in Form 12BA. Along with Form 16, Form 12BA also needs to be provided to the employees by the employer.

Perquisites for Form 12BA of the Income Tax Act

Perquisites, often known as perks, are a type of unofficial compensation or reward given to an employee in exchange for their services to an employer. The following categories apply to these benefits, which are provided in addition to the periodic payment:

• Benefits that are paid for outright in cash, such as holiday expenses, travel costs, and so forth.
• Non-cash incentives include rent-free or heavily discounted housing, employee stock options, free meals and water, gift cards, restricted stock units, a car, and other in-kind benefits.

Structure of Form 12BA of the Income Tax Act

Form 12BA is comprised of the three sections. Details in each of the sections are mentioned below:

1st Section of Form 12BA

• Information of Employees
  • Name
  • Income Details
  • Value of Perquisite (If any)
  • Designation
  • Particular FY (Financial Year)
• Information of Employer
  • Address and Name of the employer
  • TDS Assessment Range of the Employer
  • TAN Number

2nd Section of Form 12BA

• Information of Value of Perquisites
  • Details with each kind of Perquisites
  • Information on total tax deduction
  • Perquisite value chargeable to tax
  • Profit in Lieu of Salary

3rd Section of Form 12BA  

• Information of Tax and Deduction
  • From the employee’s salary, taxes are deducted.
  • Employer-remitted taxes made on the employee’s behalf.
  • A sum of taxes paid.
  • Date that money was transferred to the government.

Applicability of Form 12BA of the Income Tax Act

When the remuneration paid or payable to the employee exceeds INR 150,000, at that time only Form 12BA is required. It is not necessary to submit a separate statement in the form of “Form 12BA” if the pay is less than INR 150,000. Instead, the information on perquisites that is already included in “Part B” of Form 16 will do.

• Information that are included in Form 12BA: wages, bonuses, commissions, and any other financial compensation from one or more employees.
• Information that are not included in Form 12BA: lump-sum payments received at the time of termination of service or superannuation or voluntary retirement such as gratuity, severance pay, leave encashment, and voluntary retrenchment benefits. Dearness allowance that is not included in the calculation of the superannuation or retirement benefits of the concerned employee.

Even if there are no perks to be awarded, it is implied from the definition of “Salary” used for application purposes that Form 12BA must be issued even in the absence of any perquisites provided to the employee. In Form 12BA, the employer may state that the employee has not received any perks.

FAQs on Form 12BA of the Income Tax Act

1. What is the Due Date for filing Form 12BA Income Tax?

Immediately after the conclusion of the fiscal year, on or before June 15th, the employer must provide the employee with Form 12BA.

2. Is it compulsory to issue Form 12BA?

Only when the remuneration paid or payable to the employee exceeds INR 150,000 Form 12BA is required. If the income is less than INR 150,000, the information on perks that is already included in Form 16’s “Part B” will do, and “Form 12BA” is not necessary.

3. When and by whom is Form 12BA to be issued?

Employers must issue Form 16 together with Form 12BA, which is a tax deducted at source certificate, before the due date, which is the 15th of June of the financial year immediately following.

4. Are Forms 16 and 12BA equivalent?

An annexure to Form 16 is Form 12BA. Form 12BA offers information on the cost of benefits, and Form 16 contains information on the breakdown of the total salary, tax deductions, and government deposits.

Bottom Line

Form 12BA is issued by the employer to employees. It contains information on salary breakup, tax deduction and deposition details with the government, and information about the value of perks.