The CBDT or Central Board of Direct Taxes has notified a new format for Form 16. This requires the break up of the Tax-Exempt Allowances paid to the employee and also of all tax breaks claimed by them. In the previous format allowed the companies to give consolidated figures or break-up in different formats for both, thereby leaving some ambiguity regarding their individual composition.
Several changes have been made in the format of the Form 16 for the Assessment Year 2019-20, the new format of Form 16 will allow the Income Tax Department get a detailed break-up of the income and tax breaks claimed by a salaried person at the first instance itself. Moreover, if there is any discrepancy between the income and deductions shown in Form 16 and the ITR filed by the taxpayer, it will be quite easy to spot it. This new format is likely to help the department digitize cross checking of figures too, as it takes away the leeway that companies earlier had in providing the break-up of income and deductions and fixes the format for providing necessary details.
The new Form 16 format was notified on 12th April 2019, by the Central Board Direct Taxes. The format mentioned in the notification will come into effect from 12th May 2019, which is well ahead of the last date to issue Form 16 or the TDS certificate to the salaried employees by Employers/ Tax Deductors. Therefore, those issuing Form 16 after this date will have to do so in the new format.
List of changes in Form 16 Format: –
- The nature as well as amount of Tax-Exemption should be mentioned by Employer.
- The Part B of form 16 has been amended to provide the section wise break-up of various exemptions allowed under section 10 of the Income Tax Act.
- Form-16 will also contain the break-up of all the tax-related deductions under section 80C to 80U claimed by taxpayer from the salary paid to him/ her by your employer.
- If a taxpayer has received salary from his/ her ex-employer or other employer during the previous year and same has been reported to the current employer for TDS purposes, then separate reporting is required in case of such a salary income new Form 16.
- Standard deduction, announced in the Budget 2018, has also been introduced in Form16 under the head ‘Deduction under section 16’.
- Now, income apart from salary is confined and can only be reported under Income from
House Property and Income from Other Sources.
You can Download Form 16 For more details visit @ www.allindiaitr.com