NEW DELHI: In order to curb tax evasion by the salaried class, the Central Board of Direct Taxes (CBDT) has revised salary TDS (tax deducted at source) certificate in Form 16. The Form 16 is essentially a certificate issued by employers, detailing the employee’s salary and TDS. The Income Tax Act mandates this.
The earlier format allowed companies to give consolidated figures or break-up in different formats. The tax department felt this has been leaving room for ambiguity regarding their individual composition, which helped them in manipulating the tax slab.
The revised Form 16 will include segregated information regarding deductions under various tax-saving schemes, investments in tax-saving instruments, different allowances received by the employee as well as income from other sources.
It will also have details like income from house property, remuneration received from other employers, details of deductions in respect of interest on deposits in savings account, and rebates and surcharge, wherever applicable. This, the tax department claims, will give it more information on salary slab and will help it check tax evasion. The amended form will come into effect from May 12, 2019.
Meanwhile, the I-T department has also modified Form 24Q, which is furnished by the employer to the taxmen. It will include details like Permanent Account Number (PAN) of non-institutional entities from whom the employee has taken loan for buying or constructing housing property.
All these exercise are to ensure that there is no space left for maneuvering the tax slabs by the employers. Consequently, any discrepancy between the income and deductions shown in Form 16 and the ITR filed by the person can be immediately spotted.