Changes In Form 16 (Tds) W.E.F. 12Th May 2019

The earlier format permitted the firms or companies to give aggregate data or break-ups in different formats for both of them which resulted in problems of their personal composition.A new format for Form 16 has been notified by the CBDT (Central Board of Direct Taxes) which is the ‘salary TDS certificate’. This new format will break the tax-exempt allowances in details which are paid to the employee and apart from this, the entire tax brakes which are claimed by the taxpayers.The CBDT notified the new format for Form 16 through a notification on 12th April 2019. It will come into the effect from 12th May 2019 i.e. before the deadline of issuing Form 16 or the TDS certificate by employers for salary. So, the person who will issue Form 16 after the mentioned date will have to do it in the new format.



Reason for changes made in the New Format of the TDS Return

To allow tax employee to recheck the ITR, Form 16 and the TDS returns of the company with ease, The tax department has made concurrent changes in the new format of the TDS returns (details of TDS from the salary of employees) filed by the companies.
The salary TDS certificate has been notified because former year the tax person found many false claims made by the employees that too of huge income tax refunds. So this new configuration has been advised to evacuate all such false cases in the coming future.

Benefits of this changes

It also helps the department to recheck the data digitally as the company has already provided the breakup of the income and deduction and also fixes the format as they provided it.With the help of the new format, the tax department can see the breakup of the income and tax breaks in details of the salaried person in the first occurrence itself. Apart from this, the tax department can also see if there is any difference between the income and deductions in Form 16 and if individual files the Income Tax Returns (ITR), it will also be seen immediately.

According to the new format for Form 16 employer must mention about the nature of the tax-exempt allowances which is paid to the employee. The previous format of Form-16 was not providing the specific list of tax-exempt allowances on which the salaried person was not required to pay any tax. Now as per the revised format, the employer will have to specify the nature as well as the amount of allowances which are exempt from tax.

 Changes in Form 16

1 Detailed break-up of tax-exempt allowances such as LTA , HRA

2 Detailed tax-breaks under section 80C to 80U

3 Your previous employer income as reported to your current employer

4 Standard deduction as announced in Budget 2018

5 Any other income reported to your employer other than salary


Tax-exempt allowances received by an employee to be reported in new Form-16 under section 10

2 Less:Allowances to the extent exempt under section 10

i Travel concession U/S 10(5)

ii Death-cum-retirement gratuity U/S 10(10)

iii Commuted value of pension U/S 10(10a)

iv Leave salary encashment U/S 10(10AA)

v House rent allowance U/S 10(13A)

vi Any other exemption U/S 10

Subscribe to receive free email updates: