ITR Filing to Get Easier With New Form 16: Every year there is good news for employees who get income tax returns (ITR). The Income Tax Department has made some changes in the format of Form 16. With these changes, now information about tax, deduction and exemption in salary will be given more clean and detailed than ever. This will provide great relief to those who have trouble filling ITR.
What is Form 16
Form 16 is a document that companies release to their employees. There is evidence that the company has deposited the tax deducted on their salary in the Income Tax Department. It contains information about year -round earnings, tax deduction and exemption received under the Income Tax Act.
What happens in Part A and Part B of Form 16
There are two parts of Form 16 – Part A and Part B. In Part A, the company’s PAN/Tan Number and how much TDS (tax deduction) is known. Part B contains a complete breakup of salary and in which sections there is a tax exemption, it is known (eg 80C, 80G, 80G etc.).
What are the changes in Form 16
Now the new Form 16 will get information in more detail than before. You will know which allowances will not be taxed on which allowances and which parts of the salary were taxed. This will reduce mistakes while filling ITR and it will also be easy to claim refund.
Why have changes in Form 16
The aim of the government is that the taxpayers should be given accurate and complete information so that they do not make mistakes and do not come unnecessarily notices. This will make the tax system transparent and it will be easier to file ITRs than before.
Since when will new changes be implemented
These new rules have come into force from 20 February 2025 and will apply to the tax filing of FY 2024-25 (Assessment Year 2025-26).
Form 24Q also updated
A new column 388A has also been added to the companies which give the Form 24Q to the tax department. This will make tax reporting easier for companies and employees will get correct tax details.
Agniveer Corpus Fund and New Tax Regime
If you are Agniveer under ‘Agneepath Scheme’, then the amount deposited by the government in your ‘Agniveer Fund’ will now be considered part of your salary. However, there is no need to panic, because on this amount you will get tax exemption under section 80cch.
Some facilities are now under tax
If the company has given you a house for free (Rent-free accouational), then it will now be considered a feature i.e. ‘perquisite’ and it can be incurred tax. In this way, the new form 16 will not only reduce the troubles of the taxpayers but will also make the tax system more transparent and user-friendly.