1. What is From-16? What are the components of form-16? Basics, its types, and importance, How to download online, Part-A and Part-B along with FAQ
Form-16 is used to provide the information related to the tax deduction to their employee by the companies. Form-16 possesses all the valid details required to prepare and file your income tax return. In simple words, form-16 is a type of certificate that is furnished by your employer and it certifies the details of salary and amount of deducted TDS. Form-16 has two parts, Part A and Part B. Employers must issue it to their employees every year on or before 15th June of the subsequent year, If you misplace or lose your Form-16, you can request a replication from your employer. Form-16 is an essential form for salaried employees. If Your income for a financial year is more than the basic exemption limit of Rs. 2.5 lakh then your employer needs to deduct TDS on your salary and deposit it on time in the account of the government. Form-16 is issued under section 203 of the Income Tax act 1961. It is also known as a salary TDS certificate.
2. Format of Form-16
Form-16 is divided into 2 parts- part A and part B. We have discussed both of the forms below in detail.
This specific Part comprises a record of the collected tax from the individual’s salary income by the individual’s employer, organization, and company which is later deposited into the government’s account. This form or certificate denotes that this is signed by the employers of the employee declaring that they have deducted TDS from the salary/income of their employee. Part A includes the summary of the tax deduction by the employer and submitted to the income tax department.
Part A of form-16 includes the following details-
- All the required details of employer and employee such as TAN, address proof, PAN details, etc.
- Provide a detailed summary of salary income.
- Overview of deposited tax amount along with deducted tax.
- Challan number.
- BSR Code of the Bank.
- Tax deduction date.
- Tax deposited date.
- Declaration number of TDS.
- Employment period in the fiscal year.
- Assessment year of income assessed.
Part B of form-16 includes the following details about TDS deduction under section 80, EPF, PPF, NSC, or health insurance, net taxable income, and Tax deduction on the income. If you switched your job in a financial year then you need to decide whether you want to take part B from your both previous employers or not.
Part B of form-16 contains the following information.
- Details of salary breakup
- The precise breakup of exempted allowances under section-10
- The employer needs to prepare it manually and share it with his employee
- The relief that can be claimed under section-89
- The list of allowances and exemptions is as follows
- Travel accommodation or allowance under section 10(5)
- compensation of death-cum-retirement under section 10(10)
- Commuted value of pension under section 10(10A)
- Cash equal of leave earnings encashment under section 10(10AA)
- House rent allowance under section 10(13A)
- Amount of any other exemption under section 10
- Total payable tax (19)
- Cess on Health and education under section (16)
- Tax on gross income (13)
- Net taxable income (12)
3. Required details for filing out the Form-16
- Net taxable salary
- Deduction on Breakup of section 80C
- Income under the head
Benefits of form-16
Form-16 has many benefits that are mentioned below-
- Form-16 can be very useful when an individual goes to submit the income tax returns every year.
- Form-16 can be used as proof to justify the visa issues.
- From-16 provided all the necessary information related to your payments, and tax calculations along with the refunds.
- All the salaried employees or individuals can use form-16 as proof of income.
- Form-16 contains information such as your record of all the tax-saving investments.
4. How to get form-16 online?
It is mandatory for all the employers to provide the from-16 to their eligible employees every year before the 31 of May of a financial year. Downloading the form-16 from the online portal is easy and convenient. Following are the steps to get the from-16.
- First of all, you need to visit the site of TRACES which is mentioned below. (https://www.tdscpc.gov.in/app/login.xhtml)
- In the second step, you have to log in to the website with your valid ID and password.
- Go to the download tab where You will find from-16 A.
- Once you got the form then fill out all the necessary details.
The Finance minister of the Indian Government stated in the regulations that every salaried individual whose annual income is under the exemption limit of taxable slabs is eligible for Form-16. If you are a salaried employee and your employer has deducted tax from your salary then you are eligible to fill out the form-16. If the individual’s net income is more than 2.5 lakh then you are eligible for the form-16.
Required details from form-16 when filing an income tax return.
- The necessary details for the form-16 are given below.
- Deducted TDS amount from your salary.
- Assessment year.
- Name and details of the taxpayer.
- PAN of the employee.
- Payable tax or refund.
- PAN and TAN of the employer.
- Net deduction under section 80C.
- Generated income from the other sources is applicable for TDS.
- Any loss/ profit resulting from the house report mentioned by the employee.
- Taxable salary of the taxpayer.
- Exemption on allowances under section10.
5. Importance of Form-16
The Form-16 enables taxpayers to file their income tax returns with ease without the help of any Chartered Accountant or financial planner. Form-16 is a proof of deducted TDS and is also considered proof of income. Form-16 is an important document that is used during the verification process of getting a loan. This Form contains all the necessary details of needs to file ITR easily. The Form-16 alleviates the comparison with Form-26AS for the verification of the deposited tax amount. It also helps in the visa checklist and enables you to plan a foreign trip. This form is asked to submit, provided by the previous employers as a part of the onboarding process by certain organizations.
What are the deductions that can be filed in from-16?
There are multiple deductions contained in the form-16. We have presented all the deductions that can be filed in form-16 below.
|Income Tax Act Section 80C
|Life Insurance Premiums, (PPF)
|Income Tax Act Section 80CCC
|Income Tax Act Section 80CCD(1)
|National Pension Scheme by both self-employed and salaried people
|Income Tax Act Section 80CCD(1B)
|Further Deduction to the Pension Plan
|Income Tax Act Section 80CCD(2)
|Pension Plan Employer’s Contribution
|Income Tax Act Section 80D
|Health Insurance Policy
|Income Tax Act Section 80E
|Loans for Educational
|Income Tax Act Section 80G
|Contributions or Generous Organisations
|Income Tax Act Section 80TTA
How to file an income tax return with Form-16?
There are two ways to file an income tax return with form-16. These two are mentioned below
By the offline method,
You need to visit the official website of the income tax department and download the form-16 from there. After downloading the form from the website, fill out all the required details in the form and submit it to your nearest income tax department. You will be issued a declaration form by the accessing officer that you have to fill in. This declaration form will be stamped and returned by the accessing officer.
By the online method
To file your income tax return by the online method, one must visit the website of the income tax department’s e-filing portal (https://www.incometax.gov.in/iec/foportal). When you complete the process of filing a tax return form, an individual has to fill out the income components with needed documents. The rest of the computation of your tax liability will be automatically done by the website or you can do it yourself too. After You will be redirected to a new tab where you will see details tax-related. You can verify the bank details and declarations presented here. In the next step, Do check all the details and click on upload and Your income tax return will be submitted to the provided mail ID. After the submission, You will get a link to verify the details, open the link and check all your details carefully and save it for future consideration
Frequently Asked Questions
What is Form-16 used for?
Form-16 is used to provide the information related to the tax deduction to their employee by the companies. Form-16 possesses all the valid details required to prepare and file your income tax return.
Is it necessary for all employers to provide Form-16?
Yes. This is mandatory for every employer to issue his/her employee form-16 at the tax deduction.
How do I get my form-16?
You can download form-16 online from the website of IT department or ask from employer to issue it for the current year.
Is it possible to file the return without the form-16?
Yes. you can file your income tax return without the form-16 but you are required to submit all the necessary documents such as investment details, medical expenses, claimed allowances, and all other integral information.
What If the company or employer does not provide From-16?
If the company is not providing you with form-16 then they have to pay the minimum penalty of RS. 100 and It continues every day until the employer provides it.
What can I do If I lost my from-16?
In such a scenario, you can ask your employer to provide you with a copy of from-16. The second thing you can do is that check your mailbox, If from-16 was sent to you by email then surely you will get it in the mail.
What salary is eligible for Form 16?
The eligible salary for from-16 is Rs.2,50,000.
What is ITR?
ITR (Income Tax Return) is a form that taxpayers are believed to submit to the Income Tax Department of India. In this form, All information related to the taxpayer’s yearly income and the whole amount of tax to be paid is mentioned along with a refund that needs to be credited for that specific year.
Can I get Form 16 without TDS?
No. If there is no tax was deducted then form-16 will not be provided to you.
How to download Form-16 online?
Any individual can download form-16 in these simple following steps which are given below-
- Firstly, You have to go to the website of the income tax department.
- After being on the website, go to the forms section and press on income tax forms
- In this section, You will see fillable form and PDF options.
- If you want to download the form then click on ‘PDF’.
What are the benefits of form-16?
You can use form-16 as proof of your income. From-16 provided all the necessary information related to your payments, and tax calculations along with the refunds. All the salaried employees or individuals can use form-16 as proof of income. Form-16 contains information such as your record of all the tax-saving investments.
Is Form-16 mandatory for salaried employees?
The form is not mandatory for the employees but If the employer has deducted TDS at the source then form-16 must be issued to the employees. Salaried people can file an ITR with the help of from-16.