Revised Form 12BA

Central Board of Direct Taxes (CBDT) issued the Income-tax (3rd Amendment) Rules 2021 vide a Notification dated 11.03.2021. With this amendment, CBDT notified the Revised Form No. 12BA, Revised Form No.16 for Part B (Annexure), and Form No. 24Q Annexure-II. This is released in Gazette as per the requirement of the Government of India and this article will provide details on the same.

Synopsis of Income-tax (3rd Amendment) Rules 2021

The synopsis of Income-tax (3rd Amendment) Rules 2021 is as follows:

Major four changes are notified in Form 12BA vide Income-tax (3rd Amendment) Rules 2021 to incorporate the changes or amendments introduced in the taxation of salary income by the Finance Act, 2020
CBDT notified only one change in Part B (Annexure) of Form 16
Similar to Form 16, there is only one change notified in Annexure-II of Form No. 24Q via Income-tax (3rd Amendment) Rules 2021

These amendments are applicable from AY 2021-22.

Short Note on Form 12BA, Form 16 and Form No. 24Q

Before discussing the amendments made in Income-tax (3rd Amendment) Rules 2021, let us understand Form 12BA, Form 16 and Form No. 24Q:

Form 12BA

Form 12BA is a detailed statement showing particulars of perquisites, other fringe benefits, and profits in place of salary.

Form 12BA is required to be issued only when the salary paid or payable to the employee exceeds Rs 150,000.
If of salary not exceeding Rs 150,000, details of perquisites which already forms part of ‘Part B’ of Form 16 itself would suffice and no requirement of the separate states in the form of ‘Form 12BA’.
Hence, Form 12BA is only an additional document to be provided specifically for perquisites. ‘Salary’ for this purpose

Form 16

Form 16 is an essential certificate that is issued by employers to their employees. It provides a validation that TDS has been deducted and deposited with the government authorities on behalf of the employee. It gives a detailed summary of the salary paid to the employee and the TDS deducted.

Form 16 contains the information need to prepare and file the income tax return. Employers must issue it every year on or before 15 June of the next year, immediately after the financial year in which the tax is deducted.
Form 16 has two components – Part A and Part B.
Part A of form 16 provide details of the quarterly TDS deducted and deposited, details of PAN, TAN of the employer along other information.
Part B of Form 16 is an annexure to Part A. Part B is to be prepared by the employer for its employees and contain details of the breakup of salary, deductions approved under Chapter VI A

Form No. 24Q

At the time of paying salary to an employee, the employer deducts TDS u/s 192. The employer has to file a salary TDS return in Form 24Q. 24Q is to be submitted every quarter. Details of salary paid to the employees and TDS deducted on such payment is to be reported in 24Q

Revised Form No. 12BA

As mentioned above, major changes have been notified for Form 12BA vide the Income-tax (3rd Amendment) Rules 2021. The following four changes are notified in Form 12BA. The changes are notified to incorporate the changes or amendments introduced in the taxation of salary income by the Finance Act, 2020. Form 12BA requires reporting of perquisites, other fringe benefits or amenities and profits in place of salary with value thereof paid or provided to the employee by the employer

Amendment in Column 16 of Form 12BA

In the new Revised Form 12BA, Column 16 is amended to require reporting of “Stock options allotted or transferred by employer being an eligible start-up referred to in section 80-IAC.”. Note: Existing Columns 17, 18 and 19 have been renumbered as Columns 20, 21, and 22 respectively. New Columns 17, 18 and 19 are discussed below.

Substitution of Column 17 in Form 12BA

In the new Revised Form 12BA, Column 17 is substituted to report “Stock options (non-qualified options) other than ESOP in column 16 above

Substitution of Column 18 in Form 12BA

In the new Revised Form 12BA, Column 18 is substituted to report “Contribution by the employer to fund and scheme taxable under section 17(2)(vii).”.

Substitution of Column 19 in Form 12BA

In the new Revised Form 12BA, Column 19 is substituted to report “Annual accretion by way of interest, dividend etc. to the balance at the credit of fund and scheme referred to in section 17(2)(vii) and taxable under section 17(2)(viia).”

Revised Form 16 - Notified Changes in Part B (Annexure) of Form 16

CBDT notified only one change in Part B (Annexure) of Form 16. In Part-B of Form 16, the employer has to report whether the employee has opted for the new tax regime under section 115BAC of the Income Tax Act.

Section 115BAC of the Income-tax Act is introduced to provide for a lower rate of tax to individuals and HUF without claiming any allowances and deductions.
A salaried individual having no business income can opt for and opt-out from section 115BAC in any year for any number of times without any restriction.
Further CBDT has also clarified the procedure for deduction of tax by the employer when the employee opts for the new tax regime under section 115BAC.

Know more about the CBDT Clarification on Section 115BAC of the Income Tax Act As per the Income-tax (3rd Amendment) Rules 2021, at the top of Form 16, Part-B (Annexure), the following row is inserted to incorporate the changes: “Whether opting for taxation under section 115BAC - [Yes/No]”.

Revised Form No. 24Q - Notified Changes in Annexure-II of Form No. 24Q

Similar to Form 16, there is only one change notified in Annexure-II of Form No. 24Q via Income-tax (3rd Amendment) Rules 2021. In the annexure of Form 24Q, while reporting the salary income details of the employee, the employer has to report whether the employee has opted for the new tax regime under section 115BAC. For this purpose, existing Column No. 332 is split into two new columns - Column No. 332A and Column No. 332B. While Column. No. 332A contains the old value of Column. 332 being the ‘Name of the employee’, the new column 332B requires to report “Whether opting for taxation under section 115BAC - [Yes/No]”.

Annexure-II is required to be filed with the 4th quarter of Form 24Q by the employer.
The Annexure-II of Form 24Q contains the details of the salary income, exemption allowed and deduction claimed, and tax paid and deducted by the employer/previous employer.
From the data contained in this Annexure, Form 16 Part-B as well as ITR is prefilled by the income-tax department.

The Revised Form 12BA is attached here for reference: