Here's how the new Form 16 will change income tax return filing this year

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.

File your I-T return on time or you may end up in jail like this jeweller

It is mandatory for all registered taxpayers to file income tax returns every year, except for those who are over 80 years of age and do not have any source of income from a business or profession.

Business Standard : If you have received a notice for not filing income tax returns within due date, you might want to pay heed to it. In what could probably be the first such instance, a director of Mumbai-based firm Ms Shah Time and Jewels was sentenced to jail for three months on Wednesday for not filing income tax returns within the due date for the assessment year 2014-15, according to The Times of India.

When repeated notices sent to the firm and its director Paresh C Shah did not elicit any response, the deputy commissioner of Income Tax on November 22, 2017, filed a show cause notice seeking an explanation as to why sanction for their provision should not be given under the Income Tax Act. After that also went unanswered, a complaint was filed against Shah and the firm.

The Ballard Pier magistrate court rejected Shah's defence of 'lack of knowledge' and held him and the firm guilty of deliberate non-compliance. The court observed that imprisonment under the Income Tax Act was an exceptional and extreme move and was given only when it established deliberate failure to file returns.

"In the present case, the accused received the notice, but no explanation was given despite repeatedly serving the notices," additional chief metropolitan magistrate R S Sarkale told TOI. He further said that the explanation given by the director was "not at all acceptable."

The maximum sentence over failure to file I-T returns is two years imprisonment. However, since Ms Shah Time and Jewels did not have a poor history in filing returns, Shah was given a minimum jail-term of three months.

Filing Income Tax returns

It is mandatory for all registered taxpayers to file income tax returns every year, except for those who are over 80 years of age and do not have any source of income from a business or profession.

For the year assessment year 2019-20, the last date of filing returns is July 31. You can pay it online as well uploading your Form 16.

New ITR forms decoded: Know the changes and how to file returns with ease

The revenue department earlier this month asked officials to check for mismatch in turnover towards services between income tax returns and service tax returns by businesses during 2015-16 and 2016-17.

Income Tax dept revises Form 16: Here's all you need to know

The amended form will come into effect from May 12, 2019. This means the income tax returns for financial year 2018-19 will have to be filed on the basis of revised Form 16.

The Income Tax department has revised Form 16 by adding various details, including income from house property and remuneration received from other employers, thereby making it more comprehensive to help check tax avoidance.

The amended form will come into effect from May 12, 2019. This means the income tax returns for financial year 2018-19 will have to be filed on the basis of revised Form 16. Form 16 is a certificate issued by employers, giving details of employees' TDS (tax deducted at source) usually by mid June and is used in filing I-T returns.

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Here's the revised Form 16

form 16, income tax Click on image to see the revised Form 16

The move is aimed at stricter scrutiny of claims made by assessees to check tax avoidance or evasion.

The Income-tax Act, 1961 requires every employer to issue a certificate giving details of salary along with the tax deducted at source (TDS) of each its employee in Form 16.

It will also include segregated information regarding deductions under various tax saving schemes, investments in tax savings instruments, different allowances received by the employee as well as income from other sources.

Among other things, the revised Form 16 will also include details of deductions in respect of interest on deposits in savings account, and rebates and surcharge, wherever applicable.

The I-T department has already notified income tax return forms for fiscal 2018-19. Salaried class and those who do not have to get their accounts audited, will have to file their ITRs by July 31 this year.

Meanwhile, the income tax department has also modified Form 24Q, which is furnished by employer to the tax department. It will include additional details like Permanent Account Number (PAN) of non-institutional entities from whom the employee has taken loan for buying or constructing housing property.

Nangia Advisors (Andersen Global) Director Sanjoli Maheshwari told news agency IANS that the Form 16 and Form 24Q have been amended with an intent to make them more informative. The same has been done in order to bring the Forms in parity with latest changes made in ITR Forms such as disclosure of standard deduction and exemptions claimed under section 10.

"Earlier, where the disclosure of various deductions were mentioned in a consolidated manner, ranging from 80C, 80CCD, 80E, 80G would now be required to be disclosed separately. These specific disclosures would provide ease to the tax authorities in understanding the various components of income of the taxpayer and thereby, facilitating the conduct of scrutiny more precisely," Maheshwari said.