It is that time of the year to file your taxes, and you would have received Form 16 from your employer. However, this time, there are some changes in Form 16 that you should be aware of. Let us look at the key changes introduced in Form 16 in FY 24-25.
Reporting Non-Salary Income And Tax Deducted (TDS/TCS): "Inclusion of Income from Other Sources and Tax Deducted at Source (TDS) deducted on other income. Tax Collected at Source (TCS) is collected on specific expenses like foreign travel, car purchase, or any other higher-value purchase. These details need to be given to your employer on Form 12BBA," says Deepak Kumar Jain, founder and CEO of TaxManager.in, the tax advisory and e-filing portal platform.
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Standard Deduction Based On Chosen Tax Regime: "Standard Deductions (SD) as per the tax regime option chosen. If you have chosen the old regime, then the standard deduction would be Rs 50,000, or in the new tax regime standard deduction would be Rs 75,000," adds Jain.
Detailed Disclosures For Salary-Related Exemptions And Deductions: Enhanced disclosures for salary heads in housing rent allowance (HRA), leave travel allowance (LTA), etc., for exemptions and deductions are provided.
New Column 388A For TDS/TCS Reporting: A new Column 388A has been added (also introduced in Form 24Q) to capture TDS/TCS from non-salary sources, aligning employer and government records.
Part B of Form 16 specifies that the chosen tax regime is in the old regime or the new regime, based on the same standard deduction amount that is applicable.
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In the old regime, you were allowed to claim deductions for housing rent allowance (HRA), leave travel allowance (LTA), Section 80C, 80D, and so on. In the new regime, very few deductions are allowed, and also lower tax rate is applicable.
What You Should Do When You Get Form 16
Once you get your Form 16, you should check your personal details, including name, PAN, and address, which should match your PAN and Aadhaar. You should also be checking the chosen tax regime in Form 16, based on the same tax rates that are applicable. Alongside the same check if the salary and income details are correctly mentioned in Form 16.
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Before filing tax returns, ensure that the issued Form 16 contains all verified and correct details so that no tax notice is issued and the return is processed seamlessly.
