When it comes to Income Tax and Income Tax Return Form 16 is the most sought-after form. It is basically used by establishments and companies to provide information regarding tax deducted to their salaried employees. Also, form 16 can be used as your TDS (Tax Deduction at Source) certificate.
If you are a salaried person earning more than Rs. 2,50,000 per annum which is the basic exemption limit, then your employer is bound to deduct tax at source from your income and deposit the same to the Indian government. This form serves as a tax deduction proof while filing ITR. In case your income falls only under the exemption limit, no TDS would be deducted by the employer.
Form 16 certifies the details of your salary and tax deductions during the year as provided by the employer.
Form 16 comprises of two components- A& B.
Form 16-A consists of information regarding the employee, employer, their PAN, TAN, TIN details, Address, TDS deductions, and deposits etc.
Form 16-B consists of information regarding other income sources, tax payable, salary paid by the employer, allowed deductions etc.
Form 16 is issued by the employer and handed-over to the employee by mid of June of the next year in which tax has been deducted. A duplicated Form 16 can also be raised in case of loss or damage.
COMPONENTS OF FORM-16
- Tax payable balance payable by the employee, refunds in any form to the employee
- Information about employer like TAN, name, Tax deduction, PAN etc.
- Information regarding tax payment like challan number, amount, demand draft number, cheque number etc.
- Employee’s personal information like name, salary, pan etc.
- Acknowledgment on the employer’s end of the number of taxes paid
- Deducted tax as per section 191A
- Tax deductions and total income
- Information regarding deductions, gross salary, perks, net salary, and salary
- Paid TDS receipt
- Tax payment declarations by the employer
Form-16 Part A
The employer generates Form-16 Part A through the TRACES portal. It is authenticated and verified by the employer for the correctness of its information and contents before issuing it to the employee. A separate past A of form 16 is issued by different employers if you happen to switch jobs within one financial year for the particular period of employment in the respective organization.
Form-16 Part A consists of:
- PAN of employee
- Name of the employer
- Address of the employer
- PAN and TAN of the employer
- Certified summary of the tax deducted and deposited by the employer
Form 16 PART B
Form-16 Part B basically serves as an Annexure to part A. like Form-16 part A, part B is also different for all the employment you change in one financial year.
Form-16 Part B consist of:
- Salary breakup in detail
- Deductions under Income Tax Act section VIA
- Relief under Section 89
INFORMATION REQUIRED FROM FORM-16 FOR FILING ITR
Following things can be fetched out of form-16 while filing your ITR:
- Taxable salary
- Deductions breakup under Section 80C
- An aggregate of Section 80C deductions which includes Deductible and gross amount
- Refund due or Tax payable
- TAN and PAN of employer
- Name and Address of employer
- Taxpayer’s name and address
- Tax payer’s PAN
- Current assessment year
FAQs REGARDING FORM 16
Q1. Where do I get Form 16 from?
Form 16 can only be got from the employer. Even your previous employer can provide you with your form 16. It cannot be downloaded from any online portal.
Q2. There is no TDS deduction. Do I still need a Form 16?
In case there is no TDS, form 16 is not mandatorily required.
Q3. If no Form 16 has been issued by the employer, does that mean I don’t have to pay tax?
Although the employer is responsible for deducting tax and providing with form 16 but the onus of paying tax is on the employee(you). If your income is above the permissible exemption limit, you should pay your taxes and file ITR.
Q4. What are the other benefits of Form 16?
- It will serve as tax payment proof
- It will serve as income proof
- It will help in getting a loan
- It will serve as proof of TDS.