TDS on Salaries for FY 2025-26 – Filing of Form 12BB for Tax Deduction Claims

On 18 November 2025, the Central Pollution Control Board (CPCB) issued a circular explaining the rules for salary TDS for FY 2025–26. Employees are required to file Form 12BB, declaring their deductions and income details for correct tax calculation as per Section 192 of the Income Tax Act.

Background: Old and New Tax Regimes

The Finance Act, 2025, requires TDS to be deducted from salaries exceeding ₹2,50,000 for individuals below 60 years and ₹3,00,000 for senior citizens. Employees have the option to choose between the Old Tax Regime, which allows deductions under various sections of the Income Tax Act, and the New Tax Regime (Section 115BAC), which provides lower tax rates but without exemptions or deductions. The circular provides the applicable tax rates for both regimes.

Mandatory PAN and Aadhaar Linking

To ensure proper TDS deduction, all employees must furnish a PAN linked with Aadhaar. If PAN is not submitted, TDS will be deducted at the higher of the prescribed rate or 20%, and no rebate or deduction will be allowed. This ensures compliance with Section 206AA of the Income Tax Act.

Submission of Form 12BB

Form 12BB allows employees to declare their savings, investments, and income from other sources (except losses under the head’ house property’) for TDS computation. The form must be signed and verified, and must be accompanied by Annexures I & II containing self-attested proofs of eligible deductions.

Deadlines:

• Submission of Form 12BB and Annexures: 16th December 2025
• Submission of proofs for savings made after 16th December: 10th January 2026
• Savings made after this date can be claimed while filing the Income Tax Return.

All documents must be numbered serially to avoid processing delays. 

Key Guidelines for Deductors (DDOs)

• Only a loss under “Income from House Property” can be considered for reducing TDS.
• TDS on salaries cannot be reduced by TDS on other income.
• Employees with No Deduction or Lower Deduction certificates under Section 197 must have their certificates considered. The certificate’s Unique Identification Number is to be reported in Form 24Q.
• Form 16 (Part A & B) and Form 12BA must be prepared, authenticated, and issued through the TRACES portal.

 Early Submission Encouraged

Employees opting for the Old Tax Regime are advised to submit Form 12BB early to avoid last-minute hardship and ensure accurate TDS calculation. Soft copies of the circular and Form 12BB are available on the CPCB e-office portal and the employees’ corner.

Conclusion

Timely submission of Form 12BB, along with supporting documents, ensures correct tax deduction, compliance with statutory provisions, and smooth processing for both employees and the CPCB Finance Division. Employees are urged to act promptly to avoid last-minute complications.