What is Form 16?

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A summary on Form 16 TDS

Wondering about what is form 16a? It is a certificate offered to all salaried persons issued by the employer that includes the tax deductions and income of the employee every month. Under section 203 of the Income Tax Act,1961 and Rule 31 of Income Tax Rules, 1962, furnishing of this certificate is made mandatory to every employer. Form 16 is divided into two parts - Part A and Part B. Part A of form 16 maintain the income payment and tax deductions. Part B contains the entire summary of the salary paid. It is the responsibility of the employer to submit the document for every financial year at the end of the year without any delay or negligence. In case of delay, a penalty of Rs. 100 will be charged for every day of the default period. One can easily download form 16 for salaried employees online by providing some important details. If any organisation does not have TAN then they cannot deduct TDS from your salary. No form 16 will be provided in such a case. Generally, the employers need to issue the form 16 TDS on or before 31st May.

If your previous employer is not giving you Form 16, then you can request for issue of form 16 through registered post. This will remain as proof that you can submit to the income tax department. Changing of jobs has been a trend and being an employer they must issue the certificate annually. If you have joined in a new organisation before the previous TDS been issued, then the new employer may ask for Form 12B along with the payment slips of your previous employer. A consolidated Form 16 will be issued by the new employer at the end of the financial year. You must inform your current employer about your past employment. If you deal with multiple form 16s then include all the information in your tax return.

If you are a pension holder then you can get a pensioner's form 16 from the bank or treasury who pays you the pension for every month. Though if the pension amount is lower than the taxation level then you may not file the income tax return. The TDS certificate for pensioners includes the total amount of pension money and the tax deductions.

Form 16 format is given below along with an example for better understanding -

Importance of Form no 16

Every individual who receives an annual salary above the basic exemption limit is obliged to issue Form 16. There is a certain importance of form 16. These are -

  • The certificate acts as an important document in income tax filing.
  • It keeps track of the total amount of TDS paid. It forms a backup proof of TDS.
  • It acts as an income proof and is authentic.
  • It helps you to apply for certain loans and also improve your eligibility for approval of loans.
  • It helps the taxpayer to easily understand the tax payable without the help of an expert accountant.
  • It helps the government to look if the taxes are being paid correctly and there are no frauds. In the case of income tax scrutiny, this document will save you from some major penalties.
  • Submission of the form from the previous employer to the new helps in the proper calculation of the tax to be paid depending on the income tax slabs.
  • If you are planning to go abroad for a vacation, visa applications may include this document.

All about the contents of Form 16

Speaking about what is form no 16, you must know what are the components of the form.

The part A of the form contains the following information -

  • It contains the personal information of the employee and the employer. This includes the name, address and PAN for both of them, and TAN of the employer.
  • Assessment year that is the year of which the income and the tax deductions are being calculated.
  • The period for which the employee has been working within the financial year.
  • Summary of the salary paid to the employee
  • The date of tax deductions from the salary and tax deposition in the government's Account.
  • Summary of the tax deposited and deducted in a quarterly manner with the IT department.
  • Acknowledgement number of the TDS Payment.

The part B of the form contains the following information -

  • The total salary received by the employee.
  • The total exemption allowed as per section 10 of the Income Tax Act, 1961. Also, allowances are considered. The allowance includes - Death-cum-retirement gratuity, Travel concession, house rent allowance, cash equivalent of leave salary encashment, commuted value of pension, and others under section 10.
  • All other deductions made from the salary like an investment in Public Provident Funds, Pension Schemes, Life Insurance Policies, etc.
  • The gross income of the employee. This includes the salary provided by the employer in addition to some extra earnings as stated by the employee.
  • Net Taxable Salary on which the tax is charged. This is the income which is calculated after eliminating the total deductions.
  • Payments for Education Cess and surcharges.
  • The total amount of tax paid, tax payable income, tax due, and refund.

How to generate and download Form 16

Form 16 online generation and form 16 download can be performed through TRACES. It is an online portal that helps in filing TDS Returns, allow corrections to the document, and enables downloading form 16online. Follow the steps -

  • Visit www.tdscpc.gov.in
  • Log in using the User ID, Password, PAN or TAN, and the verification code.
  • Check the status of form 24Q. The submitted return must show a status either 'Statement Processed with Default' or ' Statement Processed without Default' to download form 16 pdf.
  • Select "Downloads"
  • Go to Form 16 from that menu
  • Select the financial year and the PAN
  • Click "Go"
  • Enter the details of the authorized person.
  • Select the option for KYC validation -
  1. Normal KYC Validation without using DSC
  2. Digital Signature Support KYC validation using DSC
  • For KYC Validation using option 2, enter the financial year, quarter, and form type. Then click on " Validate DSC".
  • For Digital Signature KYC, enter the password and proceed.
  • Select the DSC and sign for a Digital Signature Certificate option.
  • Enter the token number. For Normal KYC enter the validation code.
  • Enter CIN/BIN, PAN details, CD Record number, amount, and authentication code.
  • Remember the request numbers generated separately for two parts of the form.
  • Go to Downloads and select Requested Downloads.
  • Enter the Request numbers in the Requested Downloads to find the files.
  • Save both the parts separately.
  • Download TRACES Utility.
  • Enter the captcha code and click on the Submit button.
  • For Part, A click on "TRACES PDF Converter 1.4L" for Part B " TRACES PDF Converter 1.1L".
  • Extract the zip files.
  • Access the folders and select JAR files and then enter the required details.

Also Read:

Form 16 Online Generation & How to Download Form 16

Q1. I have already worked for 3 employers this year. Do I need to consider all three Form 16 while filing an income tax return at the end of the year?

Ans. Yes, you need to consider all of them. If you change for more jobs then consider them too.

Q2. What is TAN?

Ans. TAN refers to Tax Deduction and Collection Account Number. It is a unique 10 digit alphanumeric number issued by the Income Tax Department of India to the persons who are responsible for collecting and deducting tax.

Q3. What is the offline process for filing tax returns?

Ans. You can either download the Income Tax Return form from www.incometaxindia.gov.in or you can visit the nearest income tax office. Fill all the forms properly and submit them to "Aaykar Sampark Kendra". Fill up an acknowledgement form with care and get it signed and stamped by accessing Officer.