The Income-tax Department has introduced Form No. 124, replacing the earlier Form 12BB, under the provisions of the new Income-tax Act, 2025. The form plays an important role for salaried employees who want to claim tax deductions, exemptions, and allowances through their employer while calculating TDS on salary income.
The newly released FAQ document explains the purpose, filing requirements, supporting documents and practical use of Form No. 124 for employees across India.
What is Form No. 124?
Form No. 124 is a declaration statement submitted by an employee to the employer for claiming eligible tax benefits while computing taxable salary and TDS liability under Section 392(5)(b) of the Income-tax Act, 2025.
The form allows employees to declare claims related to:
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Interest on Housing Loan
- Investment-linked deductions
- Other eligible exemptions and deductions
Employees are also required to submit supporting documents along with the declaration to enable employers to consider the claims during salary tax computation.
Structure of Form No. 124
The form has been divided into two sections:
- Part A: This section contains personal and employment-related details of the employee.
- Part B: This section includes details of deductions, exemptions, and allowances claimed along with annexures and supporting proofs.
Is Filing Form No. 124 Mandatory?
The FAQ clarifies that filing Form No. 124 is not compulsory for every employee. However, employees who wish to claim deductions or exemptions through employer TDS calculations must furnish the form.
If the form is not submitted, employers may deduct TDS without considering eligible exemptions or deductions.
Documents Required Along With Form No. 124
The Income-tax Department has specified supporting documents for different claims:
| Nature of Claim | Supporting Documents |
|---|---|
| House Rent Allowance | Rent Agreement |
| Leave Travel Allowance | LTC/LTA supporting documents |
| Housing Loan Interest | Loan Agreement |
| Investment Deductions | Investment or expenditure proof |
PAN Requirement for Landlords
One of the important clarifications in the FAQ relates to landlord PAN details.
Employees must furnish the PAN of the landlord if annual rent exceeds Rs 1 lakh. However, Aadhaar details are not mandatory unless specifically requested by the employer.
Can Form No. 124 Be Filed Online?
The department has clarified that Form No. 124 may be submitted either physically or electronically to the employer. Separate uploading on the Income-tax portal is currently not required.
Standard Deduction Does Not Need Form No. 124
The FAQ also confirms that employees are not required to submit Form No. 124 for claiming the standard deduction, as it is automatically available while computing salary income.
Employees Changing Jobs During the Year
Employees switching jobs during a financial year can still submit Form No. 124 to the new employer. They should also provide previous salary income and TDS details through Form No. 122 for accurate tax deduction calculations.
Important Relief for Salaried Taxpayers
The introduction of Form No. 124 under the Income-tax Act, 2025 mainly aims to streamline employee tax declarations and align compliance procedures with the updated tax framework.
Tax experts believe the revised format could improve documentation consistency between employers and employees while ensuring more accurate salary TDS deductions.
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