Form 16 is a certificate which is issued by the employer of a company for the deduction of TDS in the salaries of their employees. It contains information which is necessary for your income tax fillings.
However; the CBDT has made some changes in the format requiring more information and a detailed breakup of the tax exempted allowances paid to the employee.
Earlier the companies could present consolidated figures in different formats which might leave a chance for some uncertainty. But with the new Form-16 format, the details of tax breaks claimed by a salaried person also need to be presented.
Revised Form 16: Here's all you need to know#incometax#Form16https://t.co/qXiA3IfWCB — Business Standard (@bsindia) April 17, 2019
Revised Form 16: Here's all you need to know#incometax#Form16https://t.co/qXiA3IfWCB
Regular updates have been made in the format of the TDS return form filed by different companies with the tax department. It allows the tax man to double check the employee’s ITR, Form-16 and TDS return.
Last year, the authorities detected various fraud cases where false claims of income tax refunds made by the employees were found. This could be another reason which aims to cut off such practices.
With the change in format the tax department will have a clear idea of any discrepancy between the income and deductions shown in Form-16 and the ITR filed. This method will help the department to cross-check the figures which was not possible earlier.
#Form16 exemption claims: Keep documents handy as there could be queries@tineshbhasin https://t.co/tMJEnBkZTf — Business Standard (@bsindia) April 18, 2019
#Form16 exemption claims: Keep documents handy as there could be queries@tineshbhasin https://t.co/tMJEnBkZTf
The notification for the new form format was announced on 12th April 2019 and the format will come into effect from 12th May 2019. Those who will be issuing Form 16 after this date will have to file the form in the new format.
According to the changes, the employer needs to specify the nature of tax-exempted allowances paid to the employee. Abhishek Soni, CEO of a tax-filing website has said that earlier there was no specific list for tax-exempted allowances but now with the revised format the employer will need to specify the nature as well.