The Form 16 format has been modified by the Income Tax Department (CBDT) and it was already continued from 12th May 2019. The format mentioned in the notification will be effective from May 12, 2019, which is well before the last date for issuing Form 16 for employers ’salaries. Therefore, those issuing Form 16 after the effective date need to confirm that the new format has been used.
Key Form 16 and why it's important:
Form16 is a certificate from the employer detailing the salary paid to an employee and deducting source tax (TDS) from his salary for the financial year. It has to be issued to the employee by the employer under Section 203 of the Income Tax Act, 1961. It has two sections - Parts A and B
Part A:
It contains the personal details of the employee such as address and name, employer's name and address, both PAN(Permanent Account Number) and Employer's Tax Exemption Account Number (TN) Part A with your current employer at the time of employment and TDS (withholding tax on your income) Taken) has details.
TDS deducted by the employer
Tan of the employer
Employer's Pan
Name and address of the employer
• Current assessment year
Pay Taxpayer name and address
• Employee pan
The fragment of the form contains all the details of the income earned during the service with the employer, the details of the total discount, and the taxable income. It also includes tax refundable or tax payable duty points.
Form 16 is an important document as it forms the basis for filing an income tax return (ITR). If you first hire a chartered accountant online to file income tax, he wants his Form 16.
In order to file an ITR delicately, it is essential for taxpayers to be aware of all changes in the form. If you are aware of all the changes, you can verify that your employer has provided Form 16 to you and if not, you can ask your employer to correct it in accordance with the revised guidelines.
Current Form 16 Part B lists the total amount of salary and discount only. The new format will have a list of details:
1. Salary isolated
Relief according to Re. Details of rebates and surcharges, if applicable, in the latest format. More scholarships in health and academic ways
2. Detailed Breakup of Exemption Allowance under Section 10:
A. Travel Section Exemption (Exemption) under Section 10 (5)
B. Death cum Retirement Gratuity Discount under 10 (10)
C. The modified value of the pension under section 10 (10a)
D. Leave encashment under section 10 (10AA)
E. House rent benefit U/s 10 (13A)
3. Exemptions under the Income-tax Act (in the BIA chapter):
Specific fields for discounts mentioned below are notified:
Under Section 80C - Discount for Life Insurance Premium paid, Contribution to PPF, etc.
Under Section 80 CCC - Exemption for Contribution to Pension Fund
Under Section 80CCD (1) - Exemption for a contribution of employees in the pension
In the informed pension scheme under Section 80 CCD (1B)
Under Section 80CCD (2) - Exemption for Employers' Contribution to Pension Scheme
Under Section 80D - Discount for paid health insurance premiums
Under Section 80E - Discount for interest paid on higher education
Under Section 80G - Exemption for Grants
Under Section 80TTA - Discount for interest income on savings account
4. Any other section of the chapter must cite the relevant section.
Relief under Section 89(1)
Details of rebates and surcharges, if applicable, in the latest format. More scholarships have been replaced in health and scholarship ways.
7. TDS Returns: A breaks discount under Chapter-VI-A has also been added to Form 24Q, such as TDS Returns filed by the employer. So Form 24Q has been adjusted to Form 16.
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