The Hindu : New Delhi News : Furnishing of details of perks made mandatory

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Saturday, Mar 31, 2007
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New Delhi

Furnishing of details of perks made mandatory

Special Correspondent

Employers will have to give these in annual salary certificate

NEW DELHI: Now employers will have to furnish complete details of perquisites apart from salary paid to their employees in the annual salary certificate also known as `Form 16.'

The move making furnishing of such information mandatory is seen as a significant step in tracking payments.

A notification dated March 26 from the Finance Ministry said employers will have to specify value of perquisites paid, profits in lieu of salary, entertainment allowance, and tax paid on behalf of their employees.

They will now have to provide details regarding deposit of taxes each month, after deducting from the salaries of employees, besides education cess and other charges in the TDS forms.

The changes in the tax forms are expected to provide complete details to taxmen about the gross income of employees and improve flow of income taxes on schedule to the State Exchequer.

The amendments in these forms have been introduced after the government failed to amend the Form 2F return forms due to stiff opposition from political quarters and tax experts. This has to be filled by the tax assessees along with Form 16. Form 16 A, used for issuing a certificate of deduction of tax on income earned from interest on securities, interest other than securities, lottery and crossword puzzle has also been amended to facilitate electronic filing of returns, senior IT officials explain.

They maintain that the Ministry has substituted Form 16, 16A and 27D with immediate effect, while making a provision for separate space for receipt of acknowledgement.

In the new tax forms, the space for TDS circle has been dispensed with, as TDS circle is now identifiable on the basis of TAN. It specifically requires the deductor and collector to furnish payment-wise, transaction-wise details of the tax deducted or collected and paid to the credit of the Central Government.

This should facilitate matching of the entries in the returns of TDS and TCS with those in the certificates of TDS and tax collection at source (TCS). Also expressions like GIR number of the deductor or collector have also been dropped, officials indicated.

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