What is Form 16?
Income Tax Form 16 is a certificate issued by an Employer to his/her Employee showing the details of salary and tax deducted thereon. TDS provisions in the hand of an employee become applicable only when the income from salary paid to such employee exceeds taxable limit. Therefore, the liability to issue Form 16 arises on an employer only when he deducts tax at source on the salary paid to an employee. Form 16 is issued on annual basis and an employer can download it by 31st May of next financial year (e.g. till 31st May, 2016 for salary pertaining to F.Y. 2015-16).
What if Employer does not provide you Form-16?
If an employer does not issue the Form 16, it does not relief the employee from filing income tax return. Although, an employer is compulsorily required to issue this certificate, but if he has not done so, the employee must file its return taking income from all the sources and also claiming the TDS amount which has been deducted by the employer.
Requirement of Form-16 in case of changing of job
In case of a job change, an individual must collect Form-16, if any, from his all employers and take account of all the Form 16 pertaining to the same financial year at the time of filing his income tax return. He must also disclose and furnish every relevant information related to his salary paid and tax deducted thereon to his new employer so that the correct income and deductions are shown in the TDS certificate provided by the new employer.
Benefits of Form-16
- Form 16 is the documentary evidence stating that the employer has deducted tax on salary thus letting an employee to claim correct amount of TDS.
- It provides all the details necessary to file the return as was disclosed to the employer. Any other income or deduction which the Form 16 is not carrying must be shown in the return.
- Form 16, being the proof of the income earned throughout the year, assists at the time of applying for the loan.
Form 16 format description :
Form no. 16 is divided into two parts - Part A and Part B.
Part A of Form 16 contains various details of the Employer and the Employee like TAN & PAN of the employer, PAN of the employee, their addresses etc. It also contains the details of the amount paid/credited and the Tax Deducted at Source by the employer thereon in respect of such Employee.
Part B of Form 16 contains consolidated details of the salary paid, information about various income that collectively form your Gross Total Income, various tax benefits, total income, tax on it, etc.
Let us discuss them in an elaborative manner.
Form no 16 Part A :
Figure 1: Form 16 - Part A
Figure 2: Form 16 - Part A
Form no 16 Part B :
Part B shows the Gross Salary that an Employee is entitled.
Figure 3: Form 16 - Part B
Read our guide - How to e-File Income Tax Return to quickly efile Income tax return with your Form 16. If you don’t have a Form 16, you can still efile ITR. For that refer our guide How to e-File without Form-16 now.
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