Home > Income Tax, Payroll > Changes to Form 16 format

Changes to Form 16 format

The Income Tax Department has announced modifications to the format of Form 16 in its notification dated May 31, 2010. You can take a look at the notification and the new Form 16 format by clicking here. The highlights pertaining to the new Form 16 format are as follows.

1. The new format should used for tax on salary, deducted on or after April 01, 2010.
2. Employers should issue Form 16 to employees by May 31 of the financial year, immediately following the financial year in which the salary was paid and tax was deducted.
3. There are two parts in the new Form 16 format:

Part A: Presents information such as PAN of the employer, employee etc., and a summary of the tax deducted at source with information such as Form 24Q receipt numbers, amounts of tax deducted and remitted.

Part B: Presents salary, exemption, and deduction information for the employee along with the signature of the person responsible for deducting tax in the organization.

4. Unlike the earlier Form 16 format the new one does not include details of tax remittance. Information pertaining to tax remittance including information such as challan identification number and bank BSR code should be presented in what is called Annexure B for non-government deductors and Annexure A for government deductors. Non-government employers should enclose Annexure B along with Form 16.

According to the notification,

If an assessee is employed under more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers. Part B may be issued by each of the employers or the last employer at the option of the assessee.

The purport of the above text in the notification is not very clear. We wonder why any employee would not want to have Part B of the Form 16 from any of their employers if they change jobs during a year. If anything, employees should insist on receiving the Form 16 in full from all their employers in a year in order to have adequate information for filling in their tax return. Also, in case of tax refund, only when employees have complete information in their Form 16 will they be able to claim their refund correctly.

From the point of view of employers, it would be cumbersome to check with their employees whether they want Part B of the Form 16 before issuing Form 16.

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Categories: Income Tax, Payroll
  1. Parthasarathy
    June 19, 2010 at 2:39 pm

    The link on Form 16 format leads to ITR forms and not Form 16 formats. This needs to be corrected.

    • June 19, 2010 at 10:57 pm

      Fixed it, thank you very much.

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