Tax filing gets easier: New Form 16 format may change how you file ITR, claim refund
April 24, 2025
The changes effected in the Form 16 format will ensure that the information about different taxes, deductions and exemptions on salary are put more clearly. So if you have trouble filing taxes, the new Form 16 can make things easier.
Salaried employees who file their income tax returns (ITRs) every year should be aware that the tax department has introduced some changes in the format of Form 16 related to tax deduction and perquisites. The changes effected in the Form 16 format will ensure that the information about different taxes, deductions, and exemptions on salary is put more clearly. So if you have trouble filing taxes, the new Form 16 can make things easier.
What is Form 16?
Form 16 is a document issued by companies to their employees. This tax document is proof that the employer has deposited tax deducted at source (TDS) with the Income Tax Department on salary payments to their employees. Form 16 has details about the income earned, tax deducted, and other deductions allowed under the Income Tax Act.
Form 16 has two parts: Part A & Part B
Part A has:
-Employer details (PAN/TAN)
-How much TDS was deducted
This is generated from the TRACES portal
Part B has:
-Complete breakup of your salary
-Under which sections did you get tax exemption (like 80C, 80D, 80E, 80G etc.)
Why are these changes necessary?
The purpose of these changes is to ensure that taxpayers get correct and complete information so that they do not make any mistakes while filing their ITR. This will not only make paying taxes easier but will also reduce the chances of getting a notice.
So when you sit down to fill ITR this time, read Form 16 carefully. These new changes can save you time, mistakes and tension.
What exactly has changed in Form 16?
Now Form 16 will have more details. Earlier, it used to have only basic information, but now you will get more detailed information. Now taxpayers will be able to know which allowances are tax exempted, how much deduction was made, and which benefits in your salary came under the tax net. This will reduce confusion while filing ITR and everything will be clear.
When will these changes be implemented?
These new rules have come into effect from 20 February 2025. This will affect the tax returns for the financial year 2024-25 (Assessment Year 2025-26).
Besides, one more form 24Q has also been updated. New column has been added in Form 24Q. Form 24Q, which companies submit to the tax department, now has a new column added — 388A. This will make reporting of TDS and TCS easier for companies, and employees will also get the correct tax details.
What are the most important changes in Form 16?
Contribution to Agniveer Fund will now be counted in salary
If you are an Agniveer under the Agneepath scheme, then the money that the government deposits in the “Agniveer Corpus Fund” will now be considered a part of your salary.
But there is no need to worry — tax exemption on this amount will be given under section 80CCH.
Some facilities will now be taxable
If you have got a house to live in for free from the company (rent-free accommodation), then now it will be considered a facility (Perquisite) and tax can also be levied on it.
[The Financial Express]
