If you get salary then Form 16 is required when filling Income Tax Return. Often new taxpayers are not familiar with this term. Sometimes they have some general information about this, so many of the practical and useful aspects are not known.

In this article, we have tried to give the meaning of Form 16, its importance and all the necessary information related to it. So, let’s first know what Form 16 is.

What is Form 16?

If you are in a job somewhere and your salary is more than the income tax limit, then your employer or company deducts tax every month and deposits it to the government. This is called TDS (Tax on Source). Detail of the deduction of this TDS and details of depositing it in advance with the government is recorded in Form 16.

Proof of tax accumulation

In General, Form 16 is a type of certificate, which mentions the detail of tax deducted at source from your income. Form 16 Proof of this is that your income has been deducted from tax (TDS) and deposited with the government. Hence it is also known as the Salary / TDS certificate.

It is Compulsory for companies to issue Form16

Section 203 of the Income Tax Act, 1961, has made it mandatory for employers to issue Form 16 to their employees, reflecting their total TDS on income. It serves as a proof for employees that their tax has been deducted at source.

What Details are given in Form 16?

Form 16 consists of two parts- Part A and Part B

In Part-A, you have all the details related to your TDS. This is proof of your tax deduction.

In Part-B, all other details related to your income are in addition to tax deductions. Such as total income, tax deductions, taxpayers, outstanding tax and refunds etc.

Details Given in Form 16 – Part A

·         Employer’s Personal details

·         Employee’s Personal details

·         Employee’s PAN number (Permanent account number)

·         Employer’s PAN number and TAN number

·         Assessment year

·         Salary related details

·         Summary of your total income and tax deduction

·         Details Given in Form 16 – Part B

Part B of Form 16 is a type of attachment (Annexure), in which you have details of salary paid, income from other sources, tax due and tax paid. Actually, this is your complete record of salary and tax deductions and exemptions. All these things are shown in a step-by-step manner.

·         Taxable salary of the employee

·         Deductions and Exemptions tax deductions and exemptions

·         The aggregate of all the deductions

·         Cess and Surcharge

·         Gross total income

·         Tax Payable or Refund Due How to Get Form 16? 

Your employer or company can provide Form 16. You will need to contact your HR department for this. Now the companies are also issuing digital signature form 16, which they send to the respective employee’s email. Even if you have left the job, you can get Form 16 from your employer.

Note: People often have the misconception that they can download Form-16 directly from the Income Tax Department’s TDS related website, “TRACES”. But, this is not true. You can get Form -16 only from your employer or from the company.

Where you can use Form 16? Â·      

For Filing Income Tax Return 

The form 16 is used primarily when filling the income tax return. Since it mentions your salary, tax deduction, and tax exemptions etc. While filling the Income Tax return, many of this information is required to be entered in it. 

Updation or Verification of Tax Paid

With the help of Form-16, you get the information about the deduction of TDS from your Salary and submission to the Government on behalf of the employer. All types of tax deductions and tax deposits are recorded. You can also match the information received in Form 26AS through Form- 16. Note: When filling the Income Tax Return, keep in mind that in relation to any information you are entering into it, inform wholly.

In The Loan process Of Bank

Form-16 is also often required in the process of taking loans (buying a house, for higher education etc). Banks or other financial institutions seek help from Form 16 to assess your financial capacity.

When do you receive Form 16? 

Normally, Form-16 is issued by the companies on completion of every financial year till 31st May. However, issuance date differs from company to company.

 If the employer cannot get Form 16, then?

It is compulsory for an employer to provide Form-16 whenever it is asked for his employee. However, it may be noted that your employer or company never collaborate and do not give Form-16. Or you may not be in a position to go to the employer and take form-16 on your own. In such a situation, there is no need to worry about Form 16.

Online Form 26AS can be viewed and downloaded from the Income Tax website.  All details entered in Form 16 are part of Form 26AS.

What is Form 16A?

Form-16A is a certificate related to your TDS Record, just like Form 16 the only difference is that form 16 is in relation to the salary and it is issued by your employer or the company. Whereas Form 16A consists of TDS that has been deducted on any income other than, Salary. It is a certificate.

In fact, Bank, Post Office and other such institutions from where you get income (interest, professional payment etc.) more than a certain limit, there is also a provision for deduction of TDS. In such cases, the certificate of TDS deduction is issued as Form 16A

Author: Neha Virmani