Investment Declaration: How to Run the Process Without March Chaos
Run tax declarations in two stages. Employees declare planned investments on Form 124 (earlier Form 12BB) in April or May so TDS can be set, then upload proofs between December and February against a firm cut-off. Check names, dates and amounts, and recompute TDS in March. Ask new joiners for previous-employer salary and TDS.
Every year payroll teams see the same pattern: employees ignore the tax declaration for months, then send a pile of documents in the final weeks, and March salaries go out with surprising TDS. A planned process fixes that. Since 1 April 2026, the declaration form is Form 124, which was Form 12BB before.
Two stages, not one
- ✓Declaration. The employee states planned investments and exemptions, such as rent for HRA, investments under Section 123 (earlier 80C) and home loan interest. TDS is based on this. Both HRA and Section 123 matter only for employees on the old regime.
- ✓Proof submission. The employee uploads evidence near the year end. Verified proofs replace the declared figures.
A practical timeline
| When | What happens |
|---|---|
| April or May | Collect regime choice and opening declarations from all employees |
| July to September | Reminder to update after any change in rent, loan or investments |
| December | Open the proof submission window |
| January | Review submitted proofs and flag gaps |
| February | Final deadline, with a clear cut-off date |
| March | Recompute TDS for the remaining months |
Documents to ask for
- ✓Rent receipts and the landlord's PAN for annual rent above the prescribed threshold
- ✓Life insurance premium receipts and PPF statements
- ✓Home loan interest certificate
- ✓Tuition fee receipts
- ✓Previous employer income and tax details from Form 130 (earlier Form 16)
Verification tips
- ✓Match names, dates and amounts on documents.
- ✓Reject back-dated receipts that appear to be made for the claim.
- ✓Give employees a way to resubmit, with the reason for rejection.
What to tell new joiners
New joiners should declare their previous employer's salary and TDS. Without that, the new employer under-deducts and the employee faces a tax shortfall at filing time.
Update your process for the new names
Rename the form in your portal, templates and emails. Keep the old name in brackets for a while, since employees will still call it the 12BB form.
The best tax declaration is the one that takes an employee two minutes on their phone.
Written by
HR Manager, Airwix Technologies (Sleet)
Nihit Dobariya is the HR Manager at Airwix Technologies in Ahmedabad, where he runs HR and payroll for the team behind Sleet. He writes about payroll, PF and ESIC, professional tax, the labour codes and everyday HR practice for Indian employers, and checks each rule against the official notification before it is published.
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