The Central board of direct taxes has made changes in taxpayers file their taxes

The Central board of direct taxes has made changes in taxpayers file their taxes

The Central Board of Direct Taxes (CBDT) has made two or three changes to the manner in which taxpayers file their taxes. CBDT has issued a notification on May 6th 2019, where it has made it compulsory for companies to download and issue Part-B of Form 16 to workers from the TRACES portal.

TRACES portal refer towards TDS Reconciliation Analysis and Correction Enabling System. It allows viewing the status of the challan, downloading of Form16/16A, and also annual tax credit statements, that is, Form 26AS.

Previously, it was obligatorily for the companies to download only Part-A of Form 16 from the TRACES portal and Part B was issued by utilizing third-party software. Because of this, whilst Part A was standardized for every people, Part B was not the same for everybody.

Part-A of Form 16 comprises of particulars of the taxes deducted by the company in the financial year. Part B has the break-up of gross income, which is, tax-exempt allowances, perquisites, claimed deductions, etc.

Before latest notification by CBDT, previously only Part A of Form 16 (particulars of deducted tax from wages) can be downloaded from TRACES and there was no alternative to produce and download Part-B. Consequently, every company was making various formats according to their needs, which brought about various formats of Part B of Form 16. Presently, there shall be symmetry in TDS certificates as the business would most likely generate as well as download both parts of Form 16 from TRACES. It will currently have information as specified by the division on TRACES, giving no room for incorrect or reduced data in Form 16.

Lately, the format for Form16 (TDS certificate for a wage) and Form24Q (TDS return that is filed by the company) was altered wherein the tax department would almost certainly see the detailed break-up of the earning and tax breaks which is claimed by the worker from his employer. These changes made by the Income-tax department for cross-checking the data furnished by an employee under ITR with the TDS return filed by his company.

The new changes made in Form 16 have additionally made the form in sync with the ITR forms for Financial Year 2018-19. Although an individual filing ITR 2 would still require their pay slips other than Form 16 to check and report information regarding basic pay, taxable allowances and perquisites as Form 16 do not include such data. The notification regarding changing the format of Form 16 was issued on 12th April 2019.


eStartIndia Team

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