Brief Analysis of Changes in Form 16 and Form 24Q

Brief Analysis of Changes in Form 16 and Form 24Q

CBDT has notified new form 16 and Form 24Q vide Notification No. 36/2019/F.No. 370142/4/2019-TPL dated 12th April 2019. This form has been changed so as to seek more disclosures from salaried individuals and sync the form as per new ITR forms requirements. Here is the Brief Analysis of Changes in Form 16 and Form 24Q.

Clause wise Reporting of exempt allowances, deduction available under Chapter VI-A and losses under the head house property :

Reporting of exempt allowances : In Old Form 16, although there was option to report exempt allowance, but the description was at the option of employer. As a result there was no sync in formats of form 16 as every organization had created different formats as per their requirements. Now in new format of Form 16 there are en-marked fields and employers have to mention the amount of exempt allowance before them.

Reporting of deduction available under Chapter VI-A and losses under the head house property : Similar Changes have also been made in respect of deduction available under Chapter VI-A and losses under the head house property.

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These changes would ensure that organizations follow common structure of TDS certificates and employees find it convenient to file the Income tax return on basis of TDS certificates. Further, it also gives a confirmation that the deductions and exemptions claimed by the employees in Income-tax return match with the information available in TDS certificate and TDS Statement.

Standard Deduction : In old Form 16 there was no provision of standard deduction of Rs. 40,000 introduced by Finance Act 2019. The same has been now provided for in new Form 16 notified by CBDT.

Reporting of total amount of salary received from other employer(s) is now to be done in new Form 16 introduced by CBDT.

Furnishing of PAN of lender, if deduction of interest on housing loan has been claimed under section 24(b) by the employee has been made compulsory in Form 24Q.