This
year, the Central Board of Direct Taxes (CBDT) has made a couple of
changes to the way we file our taxes. After revising the information to
be provided in Part-B of
Form-16, CBDT has issued another notification where it has made it mandatory for
employers to download and issue Part-B of Form 16 to employees only from the
TRACES portal. This notification was issued on May 6, 2019.
TRACES refers to
TDS
Reconciliation Analysis and Correction Enabling System. It enables the
viewing of challan status, downloading of Form16/16A as well as annual
tax credit statements, i.e., Form 26AS.
Earlier, employers were mandatorily required to download only Part-A of
Form-16 from the TRACES portal and Part -B was issued using a
third-party software. Due to this, while Part A was standardised for all
individuals, Part B was not the same for everyone.
Part-A of Form 16 consists of details of the taxes deducted by your
employer during the financial year. Part B has the break-up of gross
salary, i.e., tax-exempt allowances, perquisites, deductions claimed and
so on.
Chartered Accountant, Naveen Wadhwa, DGM, taxmann.com says, "Earlier,
only Part A of Form 16 (details of tax deducted from salary) could be
downloaded from TRACES and there was no option to generate and download
Part-B. Therefore, every organisation was creating different formats as
per their requirements, which resulted in different formats of Part B of
Form 16. Now, there would be symmetry in TDS certificates as the
employer will be able to generate and download both parts of Form 16
from TRACES itself."
Archit Gupta, CEO & Founder of Cleartax.com says, "Employers will no
longer be able to condense deductions data into one cell or provide
non-standardised Part-B. It will now have details as specified by the
department on TRACES, leaving no room for erroneous or reduced
information in Form 16. Earlier, Part-B of Form-16 was issued by
employers using third-party softwares and was not available for
downloading from TRACES."
Recently, the format for Form16 (TDS certificate for salary) and
Form24Q (TDS return to be filed by employer) has been amended wherein
the tax department will be able to view the detailed break-up of the
income and tax breaks claimed by the employee from his employer. Wadhwa
says, "These changes have been made by the Income-tax department to
cross check the information given by an employee under
ITR with the TDS return filed by his employer."
The changes in Form-16 have also made the form in sync with the
ITR forms
notified for FY 2018-19. However, a person filing ITR 2 would still
need their salary slips besides Form 16 to check and report details
about basic pay, taxable allowances and perquisites as Form 16 doesn't
contain such information. The notification changing the format of Form
16 was issued on April 12, 2019.