The Central Board of Direct Taxes (CBDT) 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 tax avoidance.
Form 16 is a certificate issued by employers, that gives details of an employee's TDS (tax deducted at source) paid to the government on his/her behalf. These will be issued for the previous financial year by 15 June and is used to assist in the filing of income tax returns (ITR).
Details on 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 are also provided in the certificate.
The revised Form 16 format notified by the CBDT will come into effect from 12 May 2019 and will probably also mean that for the financial year 2018-19, income tax returns will have to be filed on the basis of the revised Form 16.
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 return forms for the fiscal 2018-19 have already been notified. The salaried class with income less than Rs 50 lakh and one house property have to file the ITR-1 form. These can be filed using Form 16 issued by their employers and have to be completed by 31 July 2019.
Meanwhile, the income tax department has also modified Form 24Q, which is furnished by an 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.
Experts say that Forms 16 and 24Q have been amended to make it more elaborative and to bring them in parity with latest changes made in ITR Forms such as disclosure of standard deduction and exemptions claimed under section 10.