Quick answer: Form 12BB is the statement an employee hands you to claim HRA, LTA, home loan interest and tax-saving deductions, so you can lower their monthly TDS. Under the Income-tax Rules, 2026 it is now Form 124, filed under section 392(5)(b) of the Income-tax Act, 2025. Without it, you deduct tax with no exemptions at all.
- Form 124 is Rule 205 of the 2026 Rules, formerly Rule 26C of the 1962 Rules.
- Claims for FY 2025-26 went on Form 12BB. Claims for tax year 2026-27 onwards go on Form 124.
- The landlord’s PAN is needed when annual rent exceeds ₹1,00,000.
- The form goes to you, the employer, and is not uploaded to the income tax portal, though you keep it and the proofs for your records.
What does an employee declare on Form 124?
Four kinds of claim. Each needs proof. The Income Tax Department’s Form 124 FAQs list them.
| Claim | Proof the employee attaches |
|---|---|
| House rent allowance | Rent receipts, landlord’s name, address and PAN above ₹1,00,000 a year |
| Leave travel allowance | Tickets and travel evidence |
| Interest on a housing loan | Loan agreement and lender’s interest certificate |
| Deductions such as 80C (now s.123) and 80D (now s.126) | Premium receipts, PPF statements and similar proof |
One new line catches people out. The 2026 Rules ask the employee to disclose any relationship with the landlord, according to KPMG’s alert on the final Income-tax Rules, 2026. So rent paid to a parent or spouse now has to be stated.
How did the 2026 rules change HRA claims?
The 50% city list doubled. Pune, Bengaluru, Hyderabad and Ahmedabad joined Mumbai, Delhi, Kolkata and Chennai, so eight cities now use 50% of salary instead of 40%.
Suppose a Pune employee earns basic pay of ₹50,000 a month, HRA of ₹25,000 and pays rent of ₹35,000.
| Limb of the HRA test | Annual amount |
|---|---|
| Actual HRA received | ₹3,00,000 |
| Rent minus 10% of basic | ₹3,60,000 |
| 50% of basic (Pune since 1 April 2026) | ₹3,00,000 |
| 40% of basic (old Pune treatment) | ₹2,40,000 |
The exemption is the least of the first three, ₹3,00,000. Under the old 40% rule it would have been ₹2,40,000. That’s ₹60,000 more of tax-free pay, but only if the Form 124 is filed.
Does Form 12BB matter under the new tax regime?
Hardly. The new regime switches off HRA, LTA, 80C and 80D, so employees who stay in it have little to declare.
So the form matters mainly for old-regime employees. Ask for declarations in April and proofs well before the year ends. Section 392(5) lets you correct any excess or shortfall in TDS on salary within the same tax year. A proof that turns up in May is too late for payroll.
How does Remunance collect Form 124 declarations for your team?
Remunance runs the declaration window, checks every rent receipt and landlord PAN, and adjusts each employee’s TDS before the year closes. Those papers carry personal and family details, which is why our ISO/IEC 27001:2022 certification matters here. Our payroll compliance guide shows where the cycle falls. To take proof-chasing off your HR team’s plate, ask about our India payroll service.
What else do people ask about Form 12BB?
Is Form 12BB mandatory?
No. It is optional for the employee. But skip it and the employer must deduct TDS without any exemption or deduction, leaving the employee to claim a refund later.
What is the new name of Form 12BB?
Form 124. It took effect with the Income-tax Rules, 2026 on 1 April 2026.
Can Form 12BB claims be made after the tax year ends?
Not with the employer. Missed claims go into the employee’s own return, under the old regime only.