For years, the process of filing income tax returns (ITR) has been rather complicated and confusing for most people, but not anymore. The exercisse has now been made simple. All that employees need to do is copy and paste their salary details from Form 16, which is aligned with the ITR1 form.
Earlier, the order in which the information appeared on Form 16 was different from the order in which the information was required to be filled in the ITR1 or Sahaj form.
The taxpayers were earlier required to fill in information pertaining to salary (excluding allowances, perks and benefits), allowances not exempt, value of perks, profits in lieu of salary, and deduction under section 16. This information had to be searched for in the salary slip and entered against the respective heads in the ITR1 form. Also, the taxable allowances were required in the ITR form, whereas Form-16 only offered information pertaining to allowances exempt and non-taxable. This made filing ITR rather cumbersome and complex for salaried employees, as reporting taxable components wasn’t easy.
Form-16 is issued by employers to their employees depicting the tax deducted at source (TDS) paid on behalf of the employees. It offers a clear breakup of all the earnings from salary and other incentives along with the amount of tax paid against those earnings by the employer against the employees’ PAN.
From now on, the ITR1 or Saharj will require the exempt portion of allowances to be depicted instead of the taxable components. This will make it simple for taxpayers to file returns with information available in Form 16, without having to refer to their salary slips.