Form 16 for TDS: What lies in revised format

Know how Form 16, a certificate issued by employers, giving details of employees' TDS, has changed


New Delhi: The income tax department has revised Form 16 by adding various details, including income from house property and remuneration received from other employers, thereby making it more comprehensive to help check avoidance.

It will also include segregated information regarding deductions under various saving schemes, investments in tax savings instruments, different allowances received by the as well as income from other sources.

Form 16 is a certificate issued by employers, giving details of employees’ TDS ( deducted at source) usually by mid June and is used in filing I-T returns.

New Form 16

The revised form, which has been notified by the Income department, will come into effect from 12 May. This means the income tax returns for financial year 2018-19 will have to be filed on the basis of revised Form 16.

Among other things, the revised Form 16 will also include details of deductions in respect of interest on deposits in savings account, and rebates and surcharge, wherever applicable.

The I-T department has already notified income return forms for 2018-19. Salaried class and those who do not have to get their accounts audited, will have to file their ITRs by July 31 this year.

Meanwhile, the income department has also modified Form 24Q, which is furnished by employer to the tax department. It will include additional details like Permanent Account Number (PAN) of non-institutional entities from whom the employee has taken loan for buying or constructing housing property.

Nangia Advisors (Andersen Global) Director Sanjoli Maheshwari said the Form 16 and 24Q have been amended with an intent to make them more elaborative and informative. The same has been done in order to bring the Forms in parity with latest changes made in ITR Forms such as disclosure of standard deduction and exemptions claimed under Section 10.

“Earlier, where the disclosure of various deductions were mentioned in a consolidated manner, ranging from 80C, 80CCD, 80E, 80G would now be required to be disclosed separately. These specific disclosures would provide ease to the authorities in understanding the various components of income of the taxpayer and thereby, facilitating the conduct of scrutiny more precisely,” Maheshwari said.

The changes in Form 24Q will further help in identifying any fabricated transaction undertaken with an aim of avoidance, she added.

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