What is Form 16?

If you’re working for someone and earning a salary, you must be familiar with the term TDS. It basically stands for Tax Deducted at Source. If your salary is eligible for a TDS deduction,  you will come across the at some point in your career.  16 The form is essentially a certificate issued by an employer to the employee confirming the deduction of TDS on salary and payment of the same to the authorities on behalf of the employee.  Employees are supposed to receive the form on an annual basis from the employer.

In order to file Income Tax Returns in India, It is one of the pre-requisites and it helps vastly simplify the return filing procedure.

Even, it consists of Two Parts: Part A and Part B. As mentioned before, it s issued is issued annually, on or before 15th June of the next year, following the financial year in which tax is deducted.

It comes under Section 203 of the income tax act and is also known as the Salary TDS Certificate, Part A of this form serves as the proof of tax paid.

Form 16: Part A

Part A of form 16  is proof of the tax paid by you during your financial year. The part A of the form is generated through the TRACES Portal, by the employer. Taxpayers and PAO (Pay and Accounts Office) have the power to look at and even generate the form.

Traces Portal Homepage

If in case you change jobs in one financial year,  all employers will issue separate Part A, for the period of employment. The components of Part A  are :

  • Certificate Number
  • Name And Address of Employer
  • Name and Address of Employee
  • PAN, TAN of Deductor
  • PAN of Employee
  • Employee Reference Number  (if Provided)
  • Commissioner of Income Tax (TDS) Address. The deductor must furnish the address of the Commissioner of the Income-tax (having jurisdiction as regards TDS statements of the assessee.
  • Assessment Year and Time of Employment with the organization
  • Summary of the amount paid/credited and tax deducted at source thereon in respect of the employee
  •  The details of Tax that has been Deducted and Deposited in the Central Government is accounted for with book adjustment
  •  The details of Tax that has been Deducted and Deposited in the Central Government is accounted with Challan

Form 16 Part B

Part B of Form 16 is essentially the Annexure of Part 1. If in case you change employment(s) within one financial year, it completely is your choice if you want to obtain the part b of the certificate from all the employers, or only from the last employer. The part B of Form 16 is composed of:

  • Taxable salary of the employee
  • Applicable Tax Deductions and Exemptions under Section 80 C (Tax Saving Investments) and other investment schemes under sections 80 CCC, 80 CCD, 80 D, 80E, 80G
  • The aggregate of all deductions reduced from the taxable  income
  • Education Cess and surcharge details
  • Total tax payable and amount of TDS deducted by the employer
  • Gross total Income, which  will be the final amount on the basis of which taxes will be calculated
  • Tax Payable or Refund Due

How to Download form?

The certificate enclosed within form 16 is generally issued by the employer to the employee. The form reflects the total earnings and the taxes applicable. You can download the form online website of the Income Tax Department as well. The form is available in PDF format.

As mentioned above, it is the responsibility of the employers to give the form to the employee. However, due to some reason, you do not have the form you can download it from the Income Tax Department Website which will lead you to the TRACES portal

  • Step 1: Open the TRACES Portal
  • Step 2: Select the type of entity to be a Taxpayer
  • Step 3: Login using your credentials
  • Step 4: Go to the Downloads
  • Step 5: Select Form 16/ Form 16 A
  • Step 6: Enter PAN and other relevant details and Click GO to download

Form 16 v Form 16A

Form 16 is also called a salary TDS certificate and is issued by the employer. However, in addition to this, there is another form, form 16A that is applicable as a TDS on income alternative to the salary. Form 16A is very similar to the form 16 with details such as PAN, TAN, and the TDS deducted on incomes other than salary.

Purposes 

  • Income Tax Returns – IThe form is primarily used to File ITR in India.  The form contains all the details with regards to the income and hence becomes an essential document for ITR filing.
  • Verification – Form 16 can be used to validate and verify the TDS deductor by the employer and the actual income tax collected by the Government. TDS deductions made available in form 16 and the 16A can be cross-verified using the actuals in the 26AS Form.

For any help and assistance on ITR Filing feel free to consult the tax experts at LegalRaasta. You may file ITR yourself with the help of our ITR software or get CA’s help on filing an income tax return. You can also use the option of Business Return, Bulk Return, or Revised Return Filing with LegalRaahi.