Under the new format, Part B has been amended to provide more details about the allowances exempt under section 10 and deductions allowed under Chapter VI-A of the Act i.e. section 80C to 80U.
Business
Standard : Form 16 is issued annually, by an employer to an
employee as a proof of salary paid and taxes deducted on it. It has
two parts i.e., Part A and Part B as discussed below.
Tax
returns of the salaried taxpayers for FY 2018-19 (AY 2019-20) can
be filed in form ITR-1 or ITR-2. The details of income from salary,
allowances exempt, deductions claimed, are in Part B of Form 16,
while Part A contains the employer, employee and employment details
such as PAN, address etc.
The
Central Board of Direct Taxes (CBDT) has notified certain changes in
Form 16. The new Form 16 is made effective from 12 May, 2019.
Employers issuing Form 16 for the financial year 2018-19 will have to
issue them in the new format.
1)
Details under the new Form 16:
Under
the new format of Form
16, Part B has been amended to provide more details about the
allowances exempt under section 10 such as house rent allowance,
leave travel allowance etc., and deductions allowed under Chapter
VI-A of the Act i.e. section 80C to 80U.
2)
Impact on ITR filing
2a)
ITR-1
ITR-1
form can be filed by a resident individual taxpayer having total
income up to Rs 50 lakh. Such individuals can report income from
salary, one house property, income from other sources and
agricultural income up to Rs 5,000 in the ITR-1 form.
The
ITR-1 form requires broad details of the components of income from
salary i.e., salary, perquisites and profits in lieu of salary.
However, the form requires complete details of allowances exempt
under section 10. Therefore breakup of exemption under each allowance
such as HRA, LTA, gratuity etc must be separately reported. Each of
the deductions under chapter VI-A must also be separately reported.
After the notification of the new Form 16, these details would be
available from the new Form 16 issued to an employee and thus
facilitate the filing of the ITR. If you use an online platform to
file your ITR, these details can be automatically populated to your
ITR, minimising your effort and helping you e-file accurately.
2b)
ITR-2
The
form ITR-2 applies to taxpayers who are individuals and Hindu
Undivided Families (HUFs) who do not have income from business or
profession. Also, taxpayers who have total income exceeding Rs 50
lakh and are not eligible to file ITR-1 can file ITR-2.
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