Form 12BB
Definition
A declaration an Indian employee gives their employer of the deductions and allowances they intend to claim — such as HRA, LTA and investments — so the employer can compute TDS on salary correctly.
Related Terms in Payroll
Full and Final Settlement
The process of settling all dues when an employee leaves — unpaid salary, leave encashment, gratuity and any recoveries — in a single closing calculation. It clears both parties' outstanding obligations.
Payroll Tax
Taxes and contributions levied on wages, which may be withheld from employees, borne by employers, or both. They typically fund social-security and related programmes.
Withholding Tax
Tax an employer or payer deducts from a payment and remits to the authorities on the recipient's behalf, so tax is collected as income is earned rather than only at filing.
Payroll Register
A detailed record for each pay run listing every employee's gross pay, deductions and net pay. It is the source document for payroll journal entries and for reconciling payroll to the general ledger.
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