The Government of India has come up with a new digital Form 16 as part of its Digital India initiative. This is designed to make the process of filing your income tax return (ITR) easier for everyone.
Employees can find the ITR filing process more accessible and easier under the government’s aim to make the Form 16 digital.
What Exactly is Digital Form 16?
Digital Form 16 is an electronic version of the regular Form 16, which is important for tax purposes. It is created directly from a government website called TRACES, managed by the Income Tax Department.
This digital form 16 helps make sure that all your salary information, tax deductions, and any savings you’ve made on taxes are correctly noted and match what the government has on file.
Why is it More Important for Employees?
The new Digital Form 16 makes filing your taxes much simpler and more accurate. Since it comes straight from official records, there’s a lower chance of mistakes or conflicts with your income tax return. You can easily upload it to income tax filing websites, which will automatically fill in important information like your salary, tax deductions, and other details for you.
This not only saves you time, but it also helps speed up the processing of your tax refund, as everything is already in the right format. Plus, Digital Form 16 is generally secure; they are often password-protected and stored safely, following strict data protection standards.
It ensures data of the form consistent and reliable.
Digitisation Form 16 Advantages
The only need is to upload the received digitised copy of Form 16 on a tax-filing platform. From there, it shall automatically extract salary income, TDS, and deductions under sections like 80C and 80D, ensuring unwanted need for manual calculation.
This reduces the burden for the person as well as ensures that no error is there in it.
Speed: Speed is another benefit of the digitisation of Form 16. As the data is structured in a format aligned with the system of the income tax department, therefore tax filing platform assures faster return processing, which leads to faster ITR approvals and quicker refund disbursals.
Protection: Import’s other aspect is the security that comes with digitisation. It is significant to have secured your financial data. Therefore, to confirm that all these forms are password protected and comply with a standard format.
Also, for the use of the platforms, they do not share your or your clients’ data with other third parties. They are supported by the ISO 27001-certified data centres, which undergo VAPT (Vulnerability Assessment and Penetration Testing), keeping the data protected every time.
Read Also: Easy to Understand TDS Form 16 with Components & Benefits
Changing Jobs: People do change their jobs often over time. In the past, this has led to the accumulation of multiple Form 16s from different employers. The platform provides you with the choice to upload all of them to the tax filing platform, and you will get the figures from the system automatically.
There is less use of paper in the digitisation of Form 16, which makes it an eco-friendly option.
