Procedure, format and standards for issuance of certificate for tax deducted at source in Part B of Form No. 16

CBDT notifies procedure, format and standards for issuance of certificate for tax deducted at source in Part B of Form No. 16 in accordance with the provisions of section 203 of the Income-tax Act, 1961 read with the Rule 31 of the Income-tax Rules, 1962 through TRACES.

The Ministry of Finance has extended the deadline for employers to issue Form 16 to employees from 31 May to 15 June

Changes in Form 16

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

2 Detailed break-up of tax-breaks under section 80C to 80U as mentioned to employer

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 salaries ITR change has been incorporated i. Revised Form 16

Information in detail

Form 16 format revised after changes in ITR forms

This year, the Income Tax department has revised the format of Form 16 by adding various details to make them more elaborate

The revised format for Form 16 has already been notified by the Income Tax department and will come into effect from May 12, 2019

Form 16 is a certificate issued by your employer according to the format prescribed by the Income Tax authorities and is issued on or before June 15 of the next year following the end of the financial year in which tax was deducted

Form 16 has two parts. Part A and Part B. It is issued under section 203 of the Income-tax Act, 1961

 Part A 

The employee and employer details,
Period of employment with the employer and of the periodic TDS on your income.

 Part B

Part B has details of income earned as well as details of deductions under sections such as 80C, 80CCC and 80CCD, 80D, 80E (interest on education loan), 80G (donations), and others

If Form 16 is not issued by the stipulated deadline ( 15 June), under section 272A(2)(g) of the income tax Act, the employer is liable to pay a penalty of Rs100 per day of default till it issues the form

The new format of Form 16 asks for putting the allowances under specific provisions like gratuity, HRA, LTA, etc. They are to be disclosed under specific heading for them and the balance are to be included in one residual head,

The standard deduction of ₹40,000 for salaried individuals was introduced last year for FY 2018-19. Now, a separate row for its disclosure has been included in the revised Form 16. The changes have also been made in ITR forms.

Income from previous employer is to be disclosed in a separate row. Earlier, there was no separate disclosure for this and companies used to club this in a separate head meant for all other incomes which the employee wishes to report

Deductions like tuition fee, insurance premium, donations, NPS etc. have been categorized separately under respective heads.

disclosure of various deductions were mentioned in a consolidated manner, ranging from 80C, 80CCD, 80E, 80G would now be required to be disclosed separately.

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