New Revised Form 16 – What an employee should know about it?
Every salaried individual might be fully aware of Form 16. It is the form received by an employee from his employer containing the information regarding the TDS for the financial year. The Income Tax Department has revised the format of Form 16 and this amended form will come into effect from May 12, 2019. Now, this form will seek additional details from this year. What is Form-16? What are the revisions and changes done in Form-16 in India, which an employee should know about it?
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What is Form 16?
Form 16 is a certificate issued by employers to employees giving details of the TDS (tax deducted at source) paid to the government on his/her behalf. For the financial year 2018-19, companies will be issuing this form by June 15. This form is very handy while filing income tax return for this financial year (2018-19).
About revision in Form-16 in India
The new Form 16 will come into effect from May 12, 2019. The new Form 16 is more comprehensive now, which seeks details like income from house property or any remuneration from other employers. Individuals having salary income up to Rs 50 lakhs and income from house property in the previous financial year 2018-19 (assessment year 2019-20) can fill ITR-1 using the revised Form 16.
Why Changes are being proposed for Form-16?
As the different provisions have already been included in Form 16 now, the salaried taxpayers need not to adhere to advance tax payment dates. Also, they need not worry about paying penalty or interest for making tax payment late.
Regarding the disclosure of ‘income from other sources’ by the employees to the respective employer, it is totally at their discretion to reveal this information or not. Wherever the employee reports his other income to the employer, it will be reported on Form 16 to.
As other information will need disclosure, a salaried individual will no longer have to pay advance tax on such income sources and the employer after deducting TDS accordingly can submit the same with the government on the behalf of an employee.
What changes or additions done in the newly revised Form-16?
The following additional details have been added to the Form-16 now.
1) Income from your previous employer which you indicated to current employer.
2) Income from house property.
3) Deduction for various tax-saving schemes and tax breaks u/s 80C to 80U.
4) If the employee is in receipt of various allowances like HRA, LTA, pension salary etc. and if there is no space to disclose such allowance in Form 16, such allowance is required to be reported as “total amount of any other exemption under section 10.”
5) Investment in various tax saving schemes.
6) Income from other sources.
7) Deduction on interest on savings account
8) Surcharges and rebate wherever applicable.
9) Standard Deduction which was announced last year in 2018.
What happens if Form-16 is not issued in the new form?
The new form 16 is in sync with the ITR form and will help the income tax department to match the data reported in the ITR electronically with the data that has been collected from various other sources. If new Form-16 is not issued and there is an item which is to be disclosed in the prescribed manner, the Income Tax Department may not be able to reconcile everything and a notice may be issued electronically to explain the variance.
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How the new and revised Form16 help taxpayers?
The new Form 16 is in sync with the ITR form. It will help the taxpayers to file their income tax returns more accurately. The issuance of new Form 16 is welcomed by the financial experts also.
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New Revised Form 16 – What an employee should know about it