Understanding Form 124 (New IT Act 2025)
Form 124 is the official declaration document that salaried employees submit to their employers at the beginning of the financial year. It replaced the old Form 12BB under the new Income-tax Act, 2025. Employers use the investment and expense details provided in this form to estimate your annual taxable income and accurately deduct monthly TDS (Tax Deducted at Source) under Section 392(5)(b).
Section Mapping: Old vs New Regime
The new Act has restructured the section numbers for common deductions. Our tool automatically maps them, but here is a quick reference guide:
| Category | New Act (2025) | Old Act (1961) |
|---|---|---|
| Salary TDS Deduction | Sec 392(5)(b) | Sec 192 |
| Investments (LIC, PPF, ELSS) | Sec 123 | 80C |
| NPS Contribution | Sec 124 | 80CCD |
| Health Insurance Premium | Sec 126 | 80D |
| Education Loan Interest | Sec 129 | 80E |
| Home Loan Interest | Sec 130 | 80EE / 24(b) |
| Charitable Donations | Sec 133 | 80G |
| House Rent Allowance (HRA) | Sec 134 | 80GG / 10(13A) |
Important Rules for HRA (Sec 134)
When claiming HRA exemption, keep these rules in mind:
- Landlord PAN: If your total annual rent exceeds ₹1,00,000, you must provide your landlord's PAN. If they do not have one, a signed declaration is required.
- Renting from Family: You can claim HRA for rent paid to parents or siblings, provided the transaction happens via bank transfer and they declare it as rental income in their ITR. Claiming HRA for rent paid to a spouse is highly discouraged and often rejected by tax authorities.
- Metro Cities: The 50% limit applies to Mumbai, Delhi, Kolkata, and Chennai. For Bengaluru, Hyderabad, Pune, and Ahmedabad, the 50% limit is subject to specific gazette notification for the financial year.
Frequently Asked Questions
Common questions about Form 124 and your tax declaration.
No, Form 124 is not legally mandatory. However, if you choose not to submit it, your employer will calculate your TDS without considering any of your investments, home loan, or HRA. This will result in a much higher TDS deduction from your monthly salary.
Yes. Form 124 is just the declaration cover sheet. You must attach copies of your investment proofs (like LIC premium receipts, PPF passbook, rent receipts, and home loan certificates) when submitting it to your employer's HR or Finance department.
Absolutely not. This tool is 100% client-side. The PDF is generated entirely within your own web browser. Your sensitive PAN, address, and financial details never leave your device and are never sent to our servers.
Submitting false investment proofs or incorrect rent declarations can lead to severe consequences. Under the Income-tax Act, 2025, incorrect declarations may attract tax demands and penalties during your ITR processing. Always ensure your claims match your actual proofs.