Source: The Economic Times
The format for Form 16 has been revised by the Income Tax department. It added various details, including income from house property and remuneration received from other employers to check tax evasion. The revised format will also include segregated information regarding deductions under various tax saving schemes, investments in tax savings instruments, different allowances received by the employee as well as income from other sources.
Form 16 is a certificate issued by employers, giving details of employees’ TDS (tax deducted at source) usually by mid-June and is used in filing IT returns. The revised form, which has been notified by the Income Tax department, will come into effect from May 12, 2019.
Furthermore, the revised Form 16 will also include details of deductions in respect of interest on deposits in a savings account, and rebates and surcharge, wherever applicable. The income tax department has also modified Form 24Q, which is furnished by the 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 a loan for buying or constructing housing property.
Form 16 and 24Q have been amended to make them more elaborative and informative. The amendments have been done in accordance with the latest changes made in ITR Forms, such as disclosure of standard deduction and exemptions claimed under section 10. The various deductions under 80C, 80CCD, 80E, 80G would now be required to be disclosed separately. These specific disclosures would provide ease to the tax authorities in understanding the various components of income of the taxpayer and thereby, facilitating the conduct of scrutiny more precisely. The amendments in Form 24Q will further help in identifying any fake transaction undertaken with an aim of tax avoidance.