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What is form 16

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Form 16 is the certificate issued under section 203 of the Income tax Act for tax deducted at source (TDS) from income under the head 'salary'. It is issued on deduction of tax by the employer from an employee's salary and deposit of the same with the government. The certificate provides a detailed summary of the amount paid or credited to the employee and the TDS on the same. This form is issued annually in accordance with the provisions of the Income Tax Act (I-T Act) normally after the end of the financial year for which it is issued. It is compulsory for the employer to issue the certificate to the taxpayer.

An employee can use Form 16 to source information for filling up his/her income tax return (ITR) and should be retained as backup proof for TDS.

 

Following are the components of Form 16:

 

  • Refunds in any to the employee, or balance of taxes payable by the employee.

  • Details of the employer like collection Account Number (TAN), name, PAN, Tax deduction and etc.

  • All details of the Tax Payment, like amount, Challan number, cheque number, Demand Draft number etc.

  • Personal details of employee, like name, Permanent Account Number (PAN) etc.

  • Acknowledgement of number of the taxes paid by the employer.

  • Taxes deducted as per sections 191A.

  • Total income and tax deductions.

  • Details like salary, net salary, Gross salary, perks, deductions, etc.

  • TDS receipt paid

  • Declaration of tax payments from the employer.

 

Different Parts of Form 16

The two different Parts of Form 16 are mentioned below:

 

  • Part A

  • Part B

Part A

Before the certificate can be provided, authentication must be provided by the employer. In case you move to a new job, the new employer must provide a Form 16 as well. Each new employer must provide the Form 16. The main components of Part A are mentioned below:

  • Employer’s name and address

  • Employer’s PAN and TAN

  • Employee’s PAN

  • Details of the tax deducted and deposited on a quarterly basis

Part B

An annexure to the first part of Form 16, Part B has the below-mentioned components:

  • Salary breakup (detailed)

  • Breakup of the allowances under Section 10 of the Income Tax Act in detail

  • Deductions allowed under Chapter VI A of the Income Tax Act

  • Any relief under Section 89 of the Income Tax Act

 

Who are Eligible for Form 16?

 

Any individual who is earning a salary and must file tax returns are eligible for Form 16. In case individuals need not file tax returns, it is not mandatory for them to submit Form 16. However, employers issue the certificate so that a track of their earnings can be maintained.

How to Download Form 16?

The procedure to download Form 16 from the official Income Tax Department website is mentioned below:

  • Visit the official website of the Income Tax Department (https://www.incometaxindia.gov.in/Pages/default.aspx).

  • Under the ‘Forms/Download’ section, you will find the ‘Income Tax Forms’ option, click on it.

  • Next, you will find the ‘PDF’ and ‘Fillable Form’ options available under ‘Form 16’.

  • Click on the relevant option.

  • You will be able to download the form on the next page.

 

How to File ITR with Form 16?

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There are certain bits of information that are required when filing your ITR. These details can be found in Form 16. They include the following:

  • Allowances that are exempt under Section 10 of the Income Tax Act

  • Taxable salary

  • A breakup of the deductions under Section 16 of the Income Tax Act

  • Income from house property provided for TDS

  • Income from other sources provided for TDS

  • A breakup of the deductions under Chapter VI-A of the Income Tax Act covering the deductions under Section 80C, Section 80CCC, Section 80CCD(1), Section 80CCD(1B), Section 80CCD(2), Section 80D and Section 80E of the Income Tax Act

  • Aggregate of deductible amount under Chapter VI-A of the Income Tax Act covering the deductions under Section 10(a), Section 10(b), Section 10(c), Section 10(d), Section 10(e), Section 10(f), Section 10(g), Section 10(h), Section 10(i), Section 10(j), and Section 10(l) of the Income Tax Act

  • Refund due or net tax payable

 

Additional details from Form 16 required for filing your income tax returns

  • Tax deducted at source by the employer

  • Employer’s TAN

  • Employer’s PAN

  • Employer’s name as well as address

  • Present assessment year

  • Name and address of the taxpayer

  • PAN of the taxpayer

 

What are the benefits of Form 16?

 

Some of the benefits of the Form 16 are as follows:

  1. It acts as the ‘income from salary’ statement of the individual.

  2. It helps at the time of filing of income tax returns.

  3. It is a supporting document for the issuance of visa.

  4. It acts as a proof of income.

  5. It helps keep a tab on all your tax-saving investments.

  6. It provides a clear picture of the computation, payment, and refund of your taxes

 

DISCLAIMER- These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the author and are not individual legal advice.

It is understood that each case is fact specific and that the appropriate solution in any case will vary. Finally, the owner will not be accountable for any loses injuries or damages from the exposures or usage of this information.

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