Source: The Economic Times
The Central Board of Direct Taxes (CBDT) issued a circular on May 6, 2019, in which it has asked employers or ‘deductors’ to download Part B of Form 16 from TDS Reconciliation Analysis and Correction Enabling System (TRACES) portal and issue the same to the ‘deductees’ or their employees.
Form 16 is a proof of tax deducted at source (TDS) that the employer deducts every month from the employee’s salary. It also has details of tax deposited with the income tax department.
The CBDT said in the notification, “TDS certificate in Form 16 has two parts — Part A and Part B (Annexure). Part A contains details of tax deduction and deposit and Part B contains details of income.”
For this TDS, you can submit a claim for refund with the income tax (IT) department later at the time of filing ITR. Within days, you can get a refund if your net taxable salary falls below Rs. 3.5 lakh and if your KYC and bank details are updated with the IT department. Note that there is a rebate of Rs. 2,500 on Rs. 3.5 lakh income which means you will not have to pay any tax. Also, there is zero percent or no tax on an income of up to Rs. 2.5 lakh.
Under section 203 of the Income Tax Act, 1961 and Rule 31 of the Income Tax Rules, 1962, it is mandatory for employers to furnish TDS certificates to every employee. The relevant form for TDS certificate in case of deduction (under section 192 of Chapter XVII-B of the Act) is Form 16 which is to be issued annually, according to the CBDT notification. Most of the employers or ‘deductors’ provide to employees Form 16 in the month of June.
“Sub Rule (3) of Rule 31 of the Income Tax Rules, 1962prescribes the time limit for issuance of Form 16 by the deductor to the employee. Currently, Form 16 should be issued by June 15 of the financial year immediately following the financial year in which income was paid and tax deducted,” CBDT said.
As per the above-mentioned rules, the TDS certificate or Form 16 should contain the following details:
For the FY 2018-19, the income tax department has made some changes under the salary head of the income tax return (ITR) form Sahaj 1. For the AY 2019-20, the taxpayers are required to give details like gross salary, the break-up of salary, tax-exempt allowances, perquisites and profit in lieu of salary and so on. This information which is available in Form 16 makes the ITR filing exercise hassle-free.
Never miss out on what’s new in GST,
Accounting, TDS, and Tax compliance.
Connect with us on WhatsAapp.