Furnish Evidence of Rent Payment, 80C Deductions Now ! Rules & Form Notified.

Government has tighten noose around employees who are liable for TDS on salary under section 192 of the I.T.Act. In fact ,the government brought in amendment vide Finance Act 2015 in section 192 to provide that the person responsible for deducting tax on salary shall obtain evidence from employees regarding claim of deductions, including set off of losses. In other words, evidence for rent payment required for HRA allowance exemption, claim of deduction under Chapter VIA like sec. 80C, sec. 80D, sec. 80DD, etc. , or interest on loan borrowed for house property will have to be submitted to the DDOs or TDS deductors . THis amendment was effective from 01/06/2015 , but only because CBDT could not come up with the Rules and Forms for this , the law could not be made effective. Now the CBDT has notified the Rules and the Form for submission of evidence by employees.

What is the law ?

Section 192(2D) introduced vide Finance Act 2015 reads as under :

(2D) The person responsible for making the payment referred to in sub-section (1) shall, for the purposes of estimating income of the assessee or computing tax deductible under sub-section (1), obtain from the assessee the evidence or proof or particulars of prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and manner as may be prescribed.

Now , the governemnt has notified vide notifcation no .30/2016, F.No.142/29/2015-TPL dt 29/04/2016 by which new  Rule 26C a Form 12BB have been introduced for complaince of section 192(2D).

What does Rule 26C prescribe?

The rule prescribe that the employees will have to furnish the evidence related to nature of  the  claim  of deduction as detaled below :

Sl. No Nature of claims Evidence or particulars
1. House Rent Allowance. Name, address and permanent account number of the landlord/landlords where     the     aggregate rent paid during the previous   year   exceeds rupees one lakh.


2. Leave    travel    concession    or assistance. Evidence of expenditure.
3. Deduction of interest under the head “Income from house property”. Name, address and permanent account number of the lender.
4. Deduction under Chapter VI-A. Evidence  of  investment or expenditure.”.


Form 12BB for Furnishing Evidence

Rule 26C provides that the assessee shall furnish to the person responsible for making
payment under sub-section (1) of section 192, the evidence or the particulars of the claims in Form No.12BB for the purpose of estimating his income or computing the tax deduction at source.

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