Salaried individuals can start filing income tax returns (ITR) for the financial year 2022-23 as most employers must have issued Form 16 by now. Form 16, an essential document, provide details of TDS/TCS for various transactions between the deductor and deductee. It reflects the working of income earned as salary along-with various allowances and deductions.
Experts call Form 16 as a good starting point for filing income tax return.
Digging further
Form 16 is divided into two parts; Part A and Part B. While Part A contains details regarding the monthly deductions of tax made by the employer from the salaries of the employee, Part B contains the details of salary paid by the employer along with any other income and the tax deducted thereon.
"It is important to note that the details regarding the gross salary received (including perquisites), exempt allowances and the deductions claimed by the individual mentioned in Form 16 should be considered while filing the tax return and there should not be any mismatch," said Yeeshu Sehgal, Head of Tax Market at AKM Global.
What to check?
Firstly, employees should check whether the form is correct in terms of TAN and PAN number mentioned on it. Further, Sehgal said, an employee should match the total amount of tax deducted with the actual amount of tax deposited from the monthly payslips as well and ensure that all deductions such as house rent allowance (HRA) and standard deductions are duly considered.
Under the new tax regime, deductions in respect to life insurance premium, contributions to provident fund and deduction in respect of health insurance premium etc. are not allowed and it is mentioned on Form 16 itself whether an employee has opted for the new regime or not.
So, is Form 16 sufficient for filing ITR?
No, it may not be sufficient to file ITR if individuals have any income from sources other than salary, said Sujit Bangar, Founder at Taxbuddy.com.
"For example, an individual may be having income from freelancing, gain from sell of investments like shares, mutual fund units, bonds, property etc," he told CNBC-TV18.com.
One of the major misconceptions is that one can’t save tax other than deductions reflected in Form 16. While filing the income tax return, it’s very much needed to do a fresh analysis of tax saving investments and tax expenses incurred during financial year 2022-23. This way one can save taxes beyond what has been reflected in Form 16.
What to do in case taxpayers have more than one Form 16?
The taxable income should be computed considering all sources of income. So, if employees have more than one Form 16, they should consolidate all their incomes and, after that, compute the tax liability according to the applicable slab rate.
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