Income Tax Return: With the beginning of the new financial year of 2025-26, taxpayers have already started the process of filing the Income Tax Return. This time the government has made some important changes, making return filing easier and cleaner than ever. On the 30 April 2025, the Central Board of Direct Taxes (CBDT) has now released ITR Form 1 and Form 4 respectively.
Along with this, changes have also been made in Form 16, which is a very important document, especially for salaried taxpayers. This new form is a commendable effort by the government to make return filing a smooth experience for taxpayers.
What is Form 16 and what is its work
Form 16 is a certificate that a company or institution gives to its employees. It contains all the information related to the salary of that employee, such as total earnings, tax exemption, and how much amount was deducted as TDS (Tax Deducted at Source). Through Form 16, taxpayers can know how much tax was levied on their income and how much has already been deducted. This document helps a lot while filing returns. It is a reliable source of your income and tax deducted.
Form 16 has two parts – Part A and Part B
Part A: It contains basic information about the employee and the employer, such as name, PAN number, TAN number and details of TDS deducted every quarter. This part plays an important role in ensuring the accuracy of TDS.
Part B: It gives a complete breakup of this part of your salary, along with which allowances were tax-free and under which section you got a deduction. This part helps understand your tax liability.
New changes in Form 16
This time the Central government has made some very important changes in the Form 16 to make filing returns easier for taxpayers:
- Tax-free allowances will now be clearly shown separately.
- The information about which part is taxable and where is exempted will be even clearer.
- Exemptions like sections 80C, 80D, and 80GG will now be visible in a better way.
Apart from this, you will also have to provide information whether you have spent more than ₹ 2 lakh on foreign travel or more than ₹ 1 lakh on electricity. This additional information is being sought with the aim of increasing transparency.
ITR Form 1 and 4
ITR-1 : This can be filled by individuals whose annual income is less than ₹ 50 lakhs! Sources of income: Salary, rent from one house, bank interest and agricultural income up to ₹ 5,000! This form is simple for those whose sources of income are limited.
ITR-4: This is for taxpayers who do small business or profession and whose total income is up to ₹ 50 lakhs! This form can be filled by individuals, HUFs, and firms . It makes return filing easy for small traders.
Role of ITR-2
It is ‘essential’ for those earning from mutual funds, shares or property. If your income is not from business or profession but you have earned it from mutual funds, shares, or property, then you have to fill ITR-2 form. This is for those who are not professionals but pay tax from other non-salary income. This form provides detailed information for those who have diverse sources of income.
Return filing made easy
Government’s aim is to make the process of filing tax returns simple, transparent and less time consuming for every citizen. This is why information has been added in the new forms and Form 16 which earlier had to be searched here and there. This progressive step will make compliance convenient for taxpayers.
Right information will make tax filing even easier
With Form 16 and the new ITR forms, filing income tax returns has now become easier than ever for common taxpayers. It is important that you choose the right form, get your documents ready on time and fill in all the details related to deductions carefully! Right information and choosing the right form will prove to be helpful in making your return filing error-free and timely.