Income Tax 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 the complete details of salary paid by the employer, its components and as well as the tax deducted from salary. It is issued by the employer even when there is no tax deduction from the salary of the employee.
Income Tax Form 16 is required due to its utility in efiling of Income Tax. Since, it is a complete record of income earned and taxes paid, it is the 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 proof that correct taxes are being deducted from salary and deposited with the government.
There is a common misconception that one can download Form 16 using PAN number from TRACES website. In reality, you can only get your Form 16 from your employer.
Form-16 is divided into two parts. Part A and Part B.
Part A is the certificate of TDS. Hence Form 16 becomes proof of the TDS deducted by the employer from the salary of the employee and paid to the government account.
It is also known as TRACES Form and contains the following details:
Fundamentally, part A of form 16 provides summary of tax deducted from your income and deposited to the government as per the monthly and quarterly TDS return filed by the employer.
Part B is an annexure containing details of salary paid, other income, tax due and tax paid. This is a complete detailed record of salary and related deductions and exemptions computed in a step by step manner.
This part of the Form-16 is a complete detailed record of the salary of an individual. The name and PAN of the employee are quoted even in this part of Form16. It contains details of
Form 16 and Form 16A are the proofs of the tax deducted at source (TDS) that is issued by the employer to his employees. However, there are certain differences in both the forms that you need to know to understand which form is applicable to you.
Let us see what differences exist between these two forms.
|Form 16||Form 16A|
|Form 16 is a certificate under Section 203 of the Income Tax Act which is used as a proof of tax deducted at source from the income chargeable under the ‘salaries’ head.||Form 16A is a certificate under Section 203 of the Income Tax Act which is used as a proof of tax deducted at source for income other than salary.|
|Anyone who is earning a regular and steady income in the form of salary is eligible for this form.||Anyone who is receiving any income chargeable to tax under the income tax act and which is subject to TDS is eligible to receive this form from the payer of such income.|
|This form is applicable only towards income from salary.||This form is issued whenever any tax is deducted at source from incomes such as rent of building or plant and machinery, commission, professional fees, payments made to contractors, the sale of immovable property, interest on bank deposits or other securities, etc.|
|Form 16 comprises of proof of income, details of tax paid on behalf of the employee by the employer, PAN and TAN of the employer, employee’s PAN, acknowledgement of the tax amount paid, education cess and surcharges.||Form 16A comprises of Name, PAN, TAN of the payer of the income (deductor), PAN and name of the payee (deductee). It also comprises of the amount and the nature of payment, tax deducted and the receipt number of the TDS payment.|
Form 16 and Form 16A both are important forms and are required to help you file your IT returns smoothly. Both the forms can be verified online.
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Form-16 is generally issued by your employer in hard copy as well as soft copy. Nowadays digitally signed Form no. 16 are issued to employees via emails. These can be downloaded and used in Income Tax Return e-filing.
All salaried employees are eligible to get Form 16 from their employers. If your employer deducts TDS from your salary, then he / she must issue Form16 to you.
Form 16 is generally issued by employers by 15th of June each year. However, this date may vary from one company to the other. Certain companies may issue it sooner or later.
If you need Form16 for any previous year, you can ask your employer to issue you the same. Provisions in the Income Tax Act make it mandatory for an employer to issue Form 16 to his employee if TDS has been deducted from his salary.
If you need Form-16 for any previous year, you can ask your employer to issue you the same.
If the employer does not issue Form-16 then you may refer to your Form 26AS. This form contains details of tax deducted from your payments and deposited in the government account. If, however you cannot access this or it does not reflect any TDS payments then you must demand your Form 16 from your employer. It is your right to do so.
Even if you do not have a Form 16, you can still file a tax return. However, you will need several other documents related to your incomes & expenses like your Form 26AS, payslips, rent receipts, TDS certificates from banks, tax saving investment proofs, home & education loan certificates, travel expense bills, all bank statements etc.
A. Any remuneration or fixed regular payment received by an employee (especially a professional or a white-collar worker) from his employer is called a salary. As per the Income Tax laws, it is taxed under the head Income from salary or pension.
A. Yes, pension income is taxed as salary income. However, pension received from the United Nations organisation is exempt from tax.
A. No, it is taxable as income from other sources.
Gratuity & PF are not taxable for the government employees. For non-government employees, Gratuity is exempt subject to limits prescribed in this regard & PF receipts are exempt from tax if the same are received from a recognised PF after rendering continuous service of not less than 5 years.
A. Yes, you need to pay tax yourself if your total income exceeds the basic exemption limit and your employers have not deducted any or adequate amount of tax.
A. In this case, Form 16 will be issued by the bank.
A. This may happen if you failed to submit proofs for such deductions to your employer or your employer failed to include them in your Income Tax Return. However, you do not need to worry as most of the deductions can be claimed at the time of filing returns.