Form 16 New Rule
From this year, there are certain new rules for Form 16. “All allowances and perquisites in detailed format have to be mentioned in Form 16 from now on along with that standard deductions are also to be mentioned in Form 16,” informs Heena. Remember, in the last year budget, the finance minister had re-introduced Standard Deduction of Rs 40,000 ( for AY 2019-20) in lieu of annual medical reimbursement of Rs15,000 and Rs 19,200 of annual transport allowances
Another important change is in the Form 24Q which is a quarterly statement of deduction of tax in respect of salary for the quarters of the financial year and is to be filed by the employer. The new rule asks the employer to show “Proper salary bifurcation has to be provided from now on while filing it in the last quarter, says Heena. Although this rule is not directly for employees, the employers, however, need to ensure that to ensure generation of accurate TDS certificate in Part B of Form No. 16, they have to report correct data in Annexure II of Form 24Q.
Two parts of Form 16
Form 16 is in two parts – Part A and Part B. The Part A carries basic information about the employee and the employer such as name, address, PAN, TAN details. A summary of total TDS deducted and deposited with the government is also mentioned there.
The total income earned by the employee as salary income and also any other income as reported by the employee to one’s employer including the break-up of various deductions such as section 80 C, 80D availed by the employee gets reflected in Part B.
If someone has worked with more than one employer in the previous FY, then each of the employers will need to issue Part A of Form 16 showing the details including TDS while Part B may be issued by each of the employers or the last employer at the option of the employee.
Comments
Post a Comment