If you are a salaried employee in India, your employer deducts tax (TDS) from your salary every month. But many people don’t realize that you can reduce this TDS legally by declaring your tax-saving investments and expenses.
This is exactly where Form No. 124 comes into the picture. It is a simple declaration form that helps your employer calculate your correct taxable salary after considering deductions, exemptions, and allowances. Let’s understand this step-by-step.
What is Form No. 124 and why is it important?
Form No. 124 is a statement that you submit to your employer to declare your tax-saving claims. These claims help your employer reduce your taxable salary before calculating TDS. In simple words, without this form, your employer assumes you have no deductions, and you end up paying higher TDS.
This form allows you to claim:
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Interest on housing loan
- Investments like LIC, PPF, ELSS, etc.
- Other eligible deductions
The important point to understand is that this form does not reduce your tax directly—it helps your employer deduct the correct amount of tax every month, so you don’t pay extra and wait for refunds later.
What are the different parts of Form No. 124?
Form No. 124 is divided into two simple parts so that both personal and financial details are clearly structured.
| Part | Description | Details Included |
|---|---|---|
| Part A | Contains employee details | Name, PAN, designation, employer details, etc. |
| Part B | Contains tax-saving claims | HRA, LTA, investments, housing loan interest, etc. |
Part B is where most of the action happens because this is where you declare all your deductions and attach supporting documents. In practical life, Part A is just identification, while Part B directly impacts how much tax is deducted from your salary.
Is it mandatory to submit Form No. 124?
No, it is not compulsory to submit this form. However, there is a practical reality you should understand. If you don’t submit Form No. 124, your employer will calculate your tax without considering any deductions or exemptions.
This means:
- Higher TDS will be deducted every month
- Your in-hand salary will reduce
- You may have to claim refund later while filing ITR
So, while it is optional legally, it is almost necessary from a financial planning point of view.
What documents are required with Form No. 124?
When you claim tax benefits, you cannot just declare them—you must support them with proof. This is where documents come in. Depending on the type of claim, different documents are required:
| Nature of Claim | Supporting Documents |
|---|---|
| HRA claim | Rent agreement or rent receipts |
| LTA claim | Travel tickets, boarding passes, invoices |
| Housing loan interest | Loan certificate or interest certificate |
| Investments (80C, etc.) | LIC receipts, PPF deposit proof, ELSS statements |
These documents help the employer verify that your claims are genuine. In real life, many people make the mistake of declaring investments but not submitting proof on time. In such cases, employers may ignore the claim and deduct higher tax.
Is landlord PAN mandatory in Form No. 124?
Yes, but only in specific situations.
If your annual rent exceeds ₹1,00,000, then you must provide the PAN of your landlord.
This rule exists to prevent false HRA claims and ensure transparency.
If the rent is below this amount, PAN is generally not required. Also, Aadhaar of the landlord is not mandatory unless specifically asked by the employer.
Can Form No. 124 be submitted online?
Yes, in most cases.
You can submit this form:
- Electronically through your company’s HR or payroll portal
- Or physically, depending on company policy
One important thing to remember is that this form is not uploaded on the Income Tax portal. It is only submitted to your employer for TDS calculation.
What happens if you don’t submit Form No. 124?
If you skip this form, your employer will not consider any deductions or exemptions. This leads to:
- Higher tax deduction every month
- Lower take-home salary
- Refund claim required while filing ITR
For example, if you invest ₹1,50,000 under Section 80C but don’t declare it, your employer will still deduct tax as if you made no investment.
So, the impact is on your cash flow during the year, not the final tax liability.
Is Form No. 124 required for standard deduction?
No, it is not required.
The standard deduction is automatically allowed to all salaried employees. You don’t need to declare it separately in this form. This is one of the simplest benefits—no paperwork, no proof, and no declaration needed.
Can you include family-related expenses in Form No. 124?
Yes, certain family-related expenses can be included if they qualify under tax rules. These may include:
- Children’s tuition fees (under Section 80C)
- Health insurance premium for family
- Medical reimbursements (if allowed by employer policy)
The key idea is that if the expense is eligible for deduction under income tax rules, you can declare it in this form.
What if you change jobs during the year?
If you switch jobs, you can still submit Form No. 124 to your new employer.
But there is one important step many people miss. You must also provide details of your previous salary and TDS using Form No. 122.
This helps your new employer calculate:
- Total income for the year
- Correct remaining TDS
If you don’t do this, you may end up paying less or more tax during the year, leading to adjustments later.
What is the difference between Form 12BB and Form 124?
There has been a change in naming under the updated tax rules.
| Particulars | As per ITA 1961 & ITR 1962 | As per ITA 2025 & ITR 2026 |
|---|---|---|
| Name of Form | 12BB | 124 |
| Corresponding Section of ITA | 192 | 392(5)(b) |
| Corresponding Rule of ITR | 26C | 205 |
But the purpose of the form remains exactly the same—to declare deductions and help compute correct TDS.
Conclusion
Form No. 124 may look like just another HR form, but it plays a very important role in your salary taxation. It ensures that your employer deducts the correct amount of tax after considering your actual investments and expenses.
If you understand and use this form properly, you can improve your monthly cash flow and avoid unnecessary tax deductions. At the same time, it helps you stay organized with your financial documents. Think of it not as a compliance burden, but as a simple tool to take control of your salary and taxes in a smarter way.
