Everything about Form 16 under Income Tax
Form 16 is a certificate issued by an employer for tax deduction at source (TDS) from the salary of the employee. It contains the information you need to prepare and file your income tax return. Form 16 has two parts: – PART A and PART B. PART B is an annexure to PART A.
PART A of form 16 consist of-
- Name and address of the employer
- TAN (Tax Deduction Number) and PAN (Permanent Account Number) of employer
- PAN (Permanent Account Number) of the employee
- Summary of Tax deducted, deposited quarterly and certified by the employer.
PART B of form 16 consist of-
- Detailed description of salary income
- All the detailed description of exempted allowance under section 10 (i.e., all the allowance under the head that are provided to an employee under Income Tax Act).
- All the deduction allowed under chapter VIA (i.e., Tax deduction like LIC, Medical insurance etc).
- Relief under section 89 (i.e., tax relief section).
Tax Deductions notified field in Form 16 are-
1. Deduction for life insurance premium paid, contribution to PPF etc., under section 80C
2. Deduction for contribution to pension funds under section 80CCC
3. Deduction for employee’s contribution to pension scheme under section 80CCD(1)
4. Deduction for taxpayer’s self contribution to notified pension scheme under section 80CCD(1B)
5. Deduction for employer’s contribution to pension scheme under section 80CCD(2)
6. Deduction for health insurance premium paid under section 80D
7. Deduction for interest paid on loan taken for higher education under section 80E
8. Deduction for donations made under section 80G
9. Deduction for interest income on savings account under section 80TTA
Benefits of Form 16
Form 16 is used to get refund of the amount paid in excess of the tax liability in form of Tax Deducted at source (TDS). It also act as a proof of tax payment and income, which can be submitted while applying for loan. It consists of all the TDS that has been deducted from employee’s salary.
There are some questions which everyone have. Lets address some-
Q. How to get Form 16?
Generally, every Employer issues Form 16 to its employees or one can also download it from the TRACES portal.
Q. What if an employee changes his job and have two employer in one financial year?
If an employee changes his job then it is compulsory to get PART A of Form16 separately from every employer for the specified period of employment. Whereas in case of PART B of Form16, it is at taxpayer’s option from where he want, either from both employers or last employer.
Q. Can an employee file Income Tax Return if your employer hasn’t issue Form16?
Yes, employees can file Income Tax Return when their income is more than exemption limit (i.e., Rs 2,50,000/ Rs 3,00,000/ Rs 5,00,000) even if their employers hasn’t issue Form16. Employee’s ITR will be filled without any trouble.
Q. How to generate Form16 ?
You can generate Form16 PART-A through TRACES.
Q. What is the last date of issuing Form16?
Form16 can be issue from 16th May to 31st May of relevant financial year.
Q. Can an Employee take action against employer’s incompetence of non-filling?
Employee can give a written complaint to Assessing Officer under whose jurisdiction he/she has to file Income Tax Return. Based on the complaint Assessing Officer will take appropriate action.
Q. How to know that employer have issued Form16?
The companies and employers are required to provide the TDS certificate to the employees. As per Income Tax Act, every person who deducts TDS from a payment must furnish a certificate including the details of deduction and deposit.
Q. Can employees get Form16 for Previous Year?
Yes, employees can get Form16 of any particular year from employer or by downloading Form 26AS which has information about TDS, TAN and Salary.
Q. Can we confirm the amount of TDS deposited by your employer in your name?
Yes by checking your Form 26AS available on the Income Tax website. Read Also: How to view Form 26AS – Baba Tax
Q. What will the Gross Salary figure of your Form 16 represent?
It will denote your total CTC (excluding employer’s contribution to provident fund, if any) plus perquisite value and profit in lieu of salary as explained above.
The author of above article is Krittika Pahwa.
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