New Format of Form 16 (TDS Certificate) & Form 24Q (e_TDS Return) in line with Changed Income Tax Form ITR – 1

The CBDT has recently made changed in the Form 16 & Form 24Q vide notification Dated April 12, 2019 which will be effective from May 12, 2019. Looking at the due date for Filing of Form 24Q & issue of Form 16 after the date of effective date of this notification, the new form will be applicable for Form 16 issued for the FY 2018-19 and also the Q4 return in Form 24Q.

The new format of Form 16 & Form 24Q will bring more disclosure, clarity and provide more eyes to Income Tax Authorities to examine the Income Tax Return filed by the employees by cross-checking the same from different information providers.  A snapshot of the additional disclosure introduced is as follows:

1. Amount of salary received from other Employer(s)

2. Disclosure of some exemptions specifically which were note mentioned earlier

  • Gratuity
  • Commuted pension
  • Leave salary encashment
  • Travel Concession
  • House Rent Allowance (HRA)

3. Row for Standard Deduction inserted as per the amendments made for the FY 2018-19.

4. Declaration of other income from Employees has been restricted only to Income (or admissible loss) from House property and Income from Other Sources e.g. income from capital gain of employee can’t be reported by employer now.

5. Section-wise breakup of deductions claimed under Chapter VI-A of the Act e.g. u/s 80C, 80D, 80E, 80G etc. which were earlier not required to be reported separately.

6. Row for rebate u/s 87A also inserted.

In Form 24Q, except the above-mentioned details the additional column has also been introduced for bifurcation of salary between gross salary, value of perquisites, and profits in lieu of salary. Further, PAN of lender has become mandatory where the housing loan on which interest is paid is taken from a person other than a financial institution or the employer (previously optional).

Elevated use of technology and automated processes will expedite the processing of individual income-tax returns by comparing the line items as appearing in the individual tax return forms with the TDS returns to allow rightful deductions and exemptions claim. It will stop the mal-practices which is in domain and was in news a lot regarding the additional benefits made by some employees by making additional claims at the time of filing their personal return.

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