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Income Tax Form 16 | How it is Useful for us | How to Get it

Income Tax Form 16 | How it is Useful for us | How to Get it. In the previous articles, we have given Calculation of TDS on Salary and How to Register and File Income Tax Returns. Today we are providing the complete details of Form 16. Form 16 is a certificate issued under section 203 of the IT Act for tax deducted at source from salary. It is a detailed record of Income tax. deducted from the salary of the employee by the employer. It is also known as a Salary Certificate since it also contains complete details of salary paid by the employer and its components as well as tax deducted from salary. It is issued by the employer even when there is no tax deduction from the salary of the employee.

Who is Eligible for Form 16?

All the salaried employees are eligible to get Form 16 from their employers. If your employer deducts TDS from your salary, then he must issue Form 16 to you.

How to Get Form 16 Online?

There is a common misconception that one can download Form 16 using PAN number from TRACES website. In reality, you can get your Form 16 only from your employer.

How to Get Form 16 for Previous Years?

If you need Form 16 for any previous year, you can ask your employer to issue you the same.

How to Get Form 16 from Previous Employer?

If you need Form 16 for any previous year, you can ask your employer to issue you the same. Provisions of Income Tax Act make it mandatory for an employer to issue Form 16 to his employee if TDS has been deducted from his salary.

Structure of Form 16

Form 16 is divided into two parts. Part A and Part B.

Format of Form 16 – Part A

Part A is the certificate of TDS. Hence Form 16 becomes a proof of the TDS deducted by the employer from salary of the employee and paid into the government account.

Form 16 Part A has

  • Name and address of the employer
  • TAN & PAN of employer
  • PAN of the employee
  • Summary of tax deducted & deposited quarterly, which is certified by the employer
  • Assessment Year
  • Period of employment with the employer
  • Form 16 Part A must be generated and downloaded through Traces portal
  • Part A of the Form 16 also has a unique TDS Certificate Number.

Form 16 Part A

Form-16 Part A / Traces Form-16

When you fill your I-T Return, you need to enter the following details.

  • TDS Deducted by Employer
  • TAN of Employer
  • PAN of Employer
  • Name and Address of Employer
  • Current Assessment Year
  • Your (Taxpayer’s) Name and Address
  • Your PAN

Form 16 Part B has

  • Detailed breakup of salary paid
  • Deductions allowed under the income tax act (under chapter VIA)
  • Relief under section 89
  • If you have held more than one job during the year, you’ll have more than one Form 16.
  • Part B is prepared by the employer manually and issued along with Part A.

Form 16 Part B

Form-16 Part B / Annexure / Salary Statement

When you fill your I-T Return, you need to enter the following details.

  • Taxable Salary
  • Breakup of Sec 80C Deductions
  • Aggregate of Section 80C Deductions
  • TDS(Tax Deducted at source
  • Tax Payable or Refund Due.

Why is Form 16 required?

Form 16 is required due to its utility in Income Tax filing. Since it is complete record of income earned and taxes paid it is a single most important document that is accepted for tax filing purposes. It is also accepted as an income proof in various transactions like loan processing etc. Also Form 16 can be used to verify whether correct taxes are deposited with the government account by comparing the amounts with your Form 26AS. This is a proof that correct taxes are deducted from salary and deposited with the government.

How to download Form 16?

Form 16 is generally issued by your employer in hard copy as well as soft copy. Now a days digitally signed Form 16 are issued to employees via emails. These can be downloaded and used in Income tax return E filing.

How to use Form 16?

Form 16 is one of the documents that you need to keep handy before or while filing your ITR, which has to be done till 31 July.

While all deduction related details are mentioned in Form 16, you should cross-check the amounts with your investment and other documents. Is the health insurance premium mentioned correctly? What about life insurance premium?

“If there is an error in your Form 16, you will have to ask your employer to rectify it since it is the employer who has generated it for you,” said Rakesh Nangia, managing partner, Nangia & Co. For instance, if you have paid a premium of Rs.12,000 for a health insurance policy but the Form 16 shows only Rs.11,000, you will have to ask your employer to correct the mistake.

Remember Form 16 only declares TDS from salary. For other incomes, there are other forms. For instance, income from bank fixed deposit (FD) will be in Form 16A. You can get this form from the source. So, if you have interest income from a bank FD, you will have to get Form 16A from the bank.

Another form that comes handy is Form 26AS, the tax credit statement. It will help you verify details of TDS. Using this form you can check if your company or bank has indeed paid the tax and correctly reported to the I-T department. Form 26AS is available on the I-T department’s website. In case you have changed your job during the year, you have to get Form 16 from both employers and then file your ITR.

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