Form 16 Changes For Salaried Employees: What You Need To Know For FY 2024-25 ITR Filing?

Salaried employees in India will receive their Form 16 documents for the Financial Year 2024-25 by June 15, 2025. This is an important document for filing their Income Tax Returns (ITR) correctly. This year, Form 16 will include some changes due to updates in the July 2024 Budget.

"One of the key changes is that Form 16 will clearly mention your selected tax regime. Part B will show whether you chose the old or new regime, which will help ensure accurate ITR filing," says tax expert CA Gauri Chadha.

If you switched jobs during the financial year, make sure to get Form 16 from every employer you worked for. This helps you report all your income correctly and avoid any mistakes or mismatches when your taxes are assessed.

Taxes Deducted From Other Incomes:

A key update in the 2024 Budget allows salaried individuals to share details of TDS from other income and TCS on certain expenses with their employer. Once disclosed, this information will be included in the revised Form 16.

"If you submit Form 12BBA, any TDS on non-salary income like interest from Fixed Deposits (FDs) or TCS on things like foreign trips, foreign remittances, car purchase, etc, will now appear in your Form 16. This gives a complete picture of the total tax you've paid," explains Tax expert CA Gauri Chadha.

"This change is designed to ensure all income and related taxes are transparently reported, facilitating a smoother tax filing process," added CA Gauri Chadha.

However, if you don't share this information with your employer through Form 12BBA, these details won't be included in your Form 16.

Increased Standard Deduction Under New Tax Regime:

In FY 2024-25, employees opting for the new tax regime will see an increased standard deduction reflected in their Form 16.

Tax expert Kapil Mittal explains that, "under the new system, employees can now claim a ₹75,000 standard deduction, instead of ₹50,000, which is available under the old regime. This change is meant to offer more tax relief and is likely to help many salaried taxpayers."

"This increase is part of a larger effort to make taxes simpler and to encourage more people to choose the new regime. It's especially useful for middle-income earners who want to save more on taxes," added Kapil Mittal, Tax Expert.

However, if you switch from the new regime to the old one while filing your Income Tax Return for FY 2024-25 (AY 2025-26), you'll only be able to claim the ₹50,000 standard deduction allowed under the old system.

Higher NPS Deduction On Employer's Contribution:

Employers' contributions to the National Pension System (NPS) will now appear as higher deductions in Form 16. Tax expert Kapil Mittal explains that under the new tax regime, employees can claim up to 14% of their basic salary as a deduction when their employer contributes to their NPS account, compared to a 10% limit under the old regime.

He also noted that this change is meant to promote retirement savings and help individuals build a more secure financial future. It encourages people to save more by offering extra tax benefits under the new regime.

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