Form 12BA & Its Meaning

Form 12BA & Its Meaning

2-3 minutes

Form 12BA Meaning

Form 12BA, in simple words, can be stated as an income tax statement comprising of every information of the perquisites, amenities and other fringe benefits given by an organization and profits instead of salary.

There are several forms and documents which every organization is bound to give its employees. One such form is Form 12BA.

Now, for the uninitiated, Form 12BA is an important document between employee and employer.

Let''s dive in and learn everything about Form 12BA in one go!

But let''s first know what exactly is Form 12BA before knowing what is covered in it.

Form 12BA is an important income tax document that outlines the salient features of the advantages, amenities or fringe benefits provisions and other income in lieu of wages.

It specifies the whole range of non-monetary benefits so that proper assessment of tax payments can be done. This can find out various factors comprising the total salary by way of personalized breakdown.

Purpose of Form 12BA

Form 12BA is a way of making simplification in taxation to the employee through diversified pieces of income from the salary head.

Such income has three parts: salary/wages/pension/gratuity, perquisites, and profits in lieu of salary.

Perquisites are also known as perks, and consist of both cash and kind. Educational expenses are paid by a company on behalf of its employees. More often than not, it is the startups that have to take care of other non-cash benefits such as free accommodation for an unlimited period in rented houses they own while the champagne lasts as well.

Applicability of Form 12BA

A Form 12BA is applicable in the case of an individual earning salary income. It can capture information more than what''s covered under Form 16.

Details of employer salary and TDS, that is, tax deducted at source, and perquisites are included both in Form 16 and Form 12BA.

These documents are absolutely required for working out the tax liability and making an Income Tax Return under Indian income taxation law.

Form 12BA applies to all employees irrespective of whether they get perquisites, which is important to keep in mind.

Even people without any perquisites must get a Form 12BA from their employer, bearing a declaration that they have not enjoyed any perquisites.

This all-inclusive method of operation sees to it that there is compliance with tax laws and transparent reporting that gives the full picture of one''s financial circumstances during income tax assessment.

Form 12BA vs Form 12B

Despite what their names may suggest, Form 12BA and Form 12B actually serve rather different functions in income tax documentation.

But this is where people get it wrong. Form 12B applies to a case when an individual changes jobs during a financial year and the Income details have to be collated for both the previous job as well as immediate new employment.

It helps in the handoff of information from the former job to the new employer.

On the other hand, Form 12BA goes into details of perks, facilities, and fringe benefits provided by the employer to employees.

Whereas Form 12B is more about interim changes in employment, Form 12BA looks at these enhancements which exist beyond the wage contract and can be catered for in our overall model of how an individual''s income and lifestyle are for tax purposes.

How to Fill the Form 12BA?

Here is a step-by-step process for filling out the form 12BA:

1. Personal Information: Enter your name and Permanent Account Number (PAN). Also, remember to fill in the Assessment Year for which you are filing income or make tax payments with this form.
2. Details of Employer: Provide the details of your employer, namely address and name of employer. This makes it clear where your income originates.
3. Details of Salary Paid: Work out your total salary into its various components like basic salary, allowances, etc., as given by your employer. This basic structure of this income is seen here.
4. Value of Perquisites: List down all the perquisites that you obtain from the employer, whether it''s monetary like school fees to children or even non-monetary. Make no mistake regarding the value of every perquisite; be as accurate as possible to make correct assessments for income tax purposes.
5. Other Information: Other benefits/amenities provided by the employer: If there are any other benefits or amenities that are provided by your employer, which cannot be termed as salary or perquisites, do mention. These could be anything from a wide range of benefits, so be comprehensive in reporting.
6. Verification: Fill in the declaration and verification at the back of the form. This usually confirms, for example, that the information given to you has signed a declaration.
7. Submission: After filling in the details there, you forward the same to your employer along with other documents of a tax nature that he may need for the purpose of deducting at source.

Just like that!

This is all you need to know about Form 12BA!

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