Income Tax Return: Almost all salaried employees will get Form 16 (ITR Form 16) for the financial year 2024-25 by June 15. Due to the implementation of the announcement made in the budget, many big changes will be seen in this year’s Form 16. Let us tell you that ITR Form 16 is an important document for salaried employees.
This time Form 16 will give details of TDS on income from other sources and TCS taken on certain expenses etc. However, this will be possible only if you have submitted Form 12BBA to your employer. Income tax rules were changed in the budget so that salaried employees can inform their employer about TDS on their other sources of income as well as TCS taken on certain expenses. This TDS and TCS can be adjusted against the total tax deductible from the employee’s salary. This will help the employee and less TDS will be deducted from the salary than before.
Standard deduction increased to Rs 75,000 in the new regime
Apart from this, the government has increased the standard deduction for salaried people from Rs 50,000 to Rs 75,000 under the new income tax regime in the budget. In such a situation, if you have chosen the new tax regime, then you will get a discount of Rs 75,000 under standard deduction on TDS deduction by the employer in Form 16.Standard deduction in old tax regime is only Rs 50,000
If a taxpayer switches from the new tax regime to the old tax regime, he can claim only Rs 50,000 as standard deduction. At the same time, if the employee has opted for the new tax regime for the financial year 2024-25 (assessment year 2025-26), then he can claim more tax exemption from his gross taxable income on the employer’s contribution to NPS.
Claim of deduction up to 14% of basic salary
Under the new tax regime, employees can claim deduction of up to 14% of their basic salary under Section 80CCD (2). This deduction can be claimed on the employer’s contribution to the employee’s NPS account. This higher deduction will be reflected in your Form 16 only if you have opted for the new tax regime for TDS from salary. However, if the tax regime is changed from new to old while filing ITR, the deduction will be reduced. In the old tax regime, the employee will be eligible to claim deduction of only 10% of his basic salary under Section 80CCD (2) on the employer’s contribution to NPS.
