The CBDT has notified changes in Form 16 (TDS Certificate for Salary Income) and Form 24Q (TDS return in respect of salary)

The CBDT has notified changes in Form 16 (TDS Certificate for Salary Income) and Form 24Q (TDS return in respect of salary). The changes have been made to bring TDS certificate in sync with new ITR forms issued for AY 2019-20. The changes are as follows:

1. Clause-wise reporting of exempt allowances and deduction under Chapter VI-A

In existing Form 16 (Part B), the employer had an option to provide a description of the exempt allowance. Consequently, every organization had created different formats as per their requirements, which resulted in discorded formats of Part B of Form 16. The new Form 16 (Part B) has removed this option to write-down the description of exempt allowances. Now the employers have to mention the amount of exempt allowance before earmarked fields. Similar changes have been made in respect of deduction available under Chapter VI-A and losses under the head house property. These changes would ensure that organizations follow common structure of TDS certificates and employees find it convenient to file the 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.

Similar reporting is required in Form 24Q as well. Thus, the employer is required to provide the list of all exemptions and deductions allowed to the employee while calculating the tax to be deducted from salary under Section 192. Following details have been asked by the Dept. from the employer in Form 24Q:

Exemption under Section 10

1. Leave travel concession [Section 10(5)]
2. Gratuity [Section 10(10)]
3. Commuted Pension [Section 10(10A)]
4. Leave Salary Encashment [Section 10(10AA)]
5. House Rent Allowance [Section 10(13A)]

Deduction under Chapter VI-A

1. Life Insurance Premium or contribution to PF etc. [Section 80C]
2. Contribution to Pension funds [Section 80CCC]
3. Employee’s contribution to Notified Pension scheme (NPS) [Section 80CCD(1) and Section 80CCD(1B)]
4. Employer’s contribution to Notified Pension scheme (NPS) [Section 80CCD(2)]
5. Medical insurance premium [Section 80D]
6. Interest on higher education loan [Section 80E]
7. Donation to notified funds, charitable institution etc. [Section 80G]
8. Deduction in respect of interest from saving account [Section 80TTA]

2. Standard Deduction

The Finance Act, 2018 introduced the standard deduction of up to Rs. 40,000 for the salaried persons. The new Form 16 and Form 24Q have accordingly been revised to incorporate the effect of this amendment.

3. Reporting of salary received from other employers

If an employee has received salary from his ex-employer or other employer during the previous year and same has been reported to the current employer for TDS purposes, then separate reporting is required for such salary income in new Form 16 and Form 24Q.

4. Furnishing of PAN of the lender in case of home loan

In new Form 24Q, it is mandatory to furnish the PAN of the lender in case any deduction has been claimed in respect of housing loan taken from a person other than a Financial Institution or the Employer. Earlier, it was optional.

High Court sets aside Central Board of Direct Tax’s plan of rewarding Commissioners of Income Tax Appeal.

The Bombay high court has set aside that portion of CBDT’s action plan that sought to incentivise commissioners of income tax-appeals (CITs-A) who pass ‘quality’ orders, which could be detrimental to taxpayers.

“Any temptation in the guidelines, referred to as incentives for disposal of an appeal in a particular manner would not stand the test of law,” the high court held in its written order made available on April 22. TOI, in its edition dated March 27, had reported on the interim order where the high court had asked the Central Board of Direct Taxes (CBDT) to reconsider this aspect and apprise it on the steps that would be taken

As the financial year 2018-19 was coming to a close, CBDT apprised the court that it would carry out the requisite amendments in the action plan for the next financial year 2019-20. However, coming down strongly against the plan to incentivise appellate commissioners for quality orders, the court held: “…the guidelines in its existing form for the past financial year also cannot be allowed to have effect.” CBDT’s action plan for the financial year 2018-19 had set out that the CITs-A would be allowed additional performance credits of two units for every quality appellate order passed. The term ‘quality’ orders included cases where the CIT-A enhances the order of the I-T officer (in other words, the quantum of tax demand is increased) or where he strengthens the order of the I-T officer. It also included instances where the CIT-A levies a penalty on the additions confirmed by him to a taxpayer’s income.

When taxpayers dispute their tax demands, raised by the I-T officer, they approach the CIT-A. This is the first level of appeal. Based on facts of the case and legalities involved, orders passed by the appellate commissioner can swing either in favour of the taxpayer or the I-T department.

The high court noted that while the CBDT has wide powers under section 119(1) to issue orders, instructions and directions to other I-T authorities, as it may deem fit, for proper administration of the I-T Act, it does not empower the CBDT to issue instructions or directions to make a particular assessment or dispose a case in a particular manner. It also observed that appellate commissioners have already passed orders under the shadow of the incentivisation prograamme contained in the action plan. In this background, tax experts point out that this order of the high court gives a better standing to aggrieved taxpayers, when they appeal against orders of the appellate commissioners.

Time limits for uploading old pending appeals/disposals In Income Tax Business Application (ITBA) by April 15, 2019.

Time limits for uploading old pending appeals/disposals and current disposals made during FY 2018-19 In Appeals module of ITBA-reg

1. Appeals module of ITBA was rolled out in June 2015 and since then incessant efforts have been made to upload and bring all the pending appeals in the system. Several windows were offered for completion of such work. However, based on a spate of requests from CsIT(A) across charges, it seems that a certain number of appeals are still to be uploaded in systems for various reasons. Consequently, disposal of such appeals is also happening outside the system thus adversely impacting the Appeal MIS.

2. In order to resolve this problem, another window for uploading old pending appeals and current disposals made during FY 2018-19, is being provided as per following table:

Sr.No.	Particulars	Time Allowed
1	Uploading of disposal of appeals made during FY 2018-19.	By 15/04/2019
2	The paper appeals that either got accidentally deleted or old appeals that were not uploaded in ITBA till now but same were disposed offline in FY 2018-19, same may first be entered/uploaded and thereafter disposal of such appeals be uploaded so that same is duly reflected in the MDR of March 2019.	By 30/04/2019
3	The old paper appeals pending as on 31/03/2019 and yet to be uploaded in systems, may be entered in “Appeals Module” so that opening balance of pendency as on 01/04/2019 is accurately captured.	By 15/05/2019

3. 3. Accordingly, the CIT(A) of your region may be directed to take timely necessary action in the matter and ensure that complete pendency of their charge is uploaded in ITBA within the time allowed.

This issues with the approval of Member (A&J).

Income Tax return form (ITR) 1, 2, 3, 4 & 5 for AY 2019-20 (FY 2018-19) are available for e-Filing

Excel / Java Utility for ITR 1, ITR 2, ITR 3, ITR 4 & ITR 5 for AY 2019-20 is available for e-Filing. Other ITR Utilities will be available shortly.

Update on 09/04/2019

ITR 1 is For Individuals being a Resident (other than Not Ordinarily Resident) having Total Income upto Rs.50 lakhs, having Income from Salaries, One House Property, Other Sources (Interest etc.), and Agricultural Income upto Rs. 5 thousand (Not for an Individual who is either Director in a company or has invested in Unlisted Equity Shares)

ITR 4I is for Individuals, HUFs and Firms (other than LLP) being a Resident having Total Income upto Rs.50 lakhs and having income from Business and Profession which is computed under sections 44AD, 44ADA or 44AE (Not for an Individual who is either Director in a company or has invested in Unlisted Equity Shares)

IUpdate on 02.05.2019

ITR 2 is for For Individuals and HUFs not having income from profits and gains of business or profession

Update on 10.05.2019

ITR 3strong> is For individuals and HUFs having income from profits and gains of business or profession

Update on 28.05.2019

ITR 5 is For persons other than:- (i) Individual, (ii) HUF, (iii) Company and (iv) Person filing Form ITR-7