The income tax department (I-T) on Tuesday announced changes in reporting format for individuals claiming tax deduction on leave travel allowance (LTA), leave travel concessions (LTC), house rent allowance and interest paid on home loans.
Presently, industry practice is that employees claiming tax deduction file self-declarations to employers with regard to tax savings/deductions along with the evidences for each financial year. Employer deducted tax at sources on the estimated income of employees, after considering such self-declarations of tax savings.However, until now, there was no prescribed format for filing the declarations.
Accordingly, to bring clarity vis-a-vis the declaration to be filed for deductions claimed by employees, a prescribed form (Form 12 BB) has been introduced (under rule 26C).
Following are the key particulars under Form 12BB:
We understand that the key reason for the same should be standardisation of the format in which declarations are furnished. In this regard, reference can be drawn from the Supreme Court Judgment in the case of CIT vs L&T (181 Taxmann 71 (SC) (2009)), wherein it was held that employers are under no statutory obligation to collect bills and details to prove that the employees have utilised the amounts obtained against these claims on travel and related expenses.
Accordingly, the current amendment now obligates the employers to collect the relevant details in prescribed format, along with relevant evidence, before allowing the benefit to the employees. Thus, the new format would now ensure collection and maintenance of information in a defined format, which could further assist in streamlining the assessment process, due to standardization of information so collected and produced to the tax authorities.
Thus, the above is a welcome move, as the same in long run can put in abeyance undesired litigation on such matters.
Additionally, the said circular has also announced the change in dates for filing TDS Returns.
Details for the same are as under:
Presently, the due date for filing TDS return for government and non-government are different, in order to bring uniformity and to give deductors sufficient time in filing of TDS statement, CBDT has revised the due date for filing TDS return for government and non- government deductors w.e.f 01.06.2016 as follows:
Gaurav Talwar is partner – Felix Advisory and Jatin Kumar is Consultant – Felix Advisory.