TheForm 16is an important document for people
who do a job and earn a salary income. This document is a certificate that you
get from your employer. Look at it as a proof of employment and remuneration
received. The Form 16 certifies that you have received salary from your
employer for a particular period and your employer has deducted TDS–tax
deducted at source–on the salary paid to you.
receive the Form 16 once a year, after a particular financial year has ended.
If you changed jobs in the financial year, you would receive a Form 16 from
each employer in the months of May or June. The fuss about the Form 16
Typically, a couple of months prior to the deadline tofile income tax returns, you will hear a lot about the Form 16. This is because it is one of
the most important tax forms and contains most of the information you would
need to prepare and file your tax returns. OnFilingmantra,
you have to just upload your Form 16. We’ll automatically prepare your tax
returns for you. Part A and Part B
Your Form 16 has two parts. Part A has all the basic details about your
employer and you and your employment period with the employer. Part B is
critical because it has a detailed breakup of your salary and the tax-saving
deductions that you have claimed by way of certain investments and expenses. It is an employer’s responsibility to provide the Form 16 when there is
tax deducted at source. If you haven’t received your Form 16, you should ask
your employer for it. This is one document that cannot be downloaded online. E-filing using Form 16
On the Income Tax Department’s website, you can e-file your tax returns using
the information provided in your Form 16. The information will have to be
manually entered into the relevant fields and then submitted to get your
returns filed. You
have to justupload your
Form 16and the website will automatically prepare the returns for you.
The other Form 16
There’s also something like theForm
16A. While the Form 16 has details about your salary, Form 16A has details of
tax deducted at source on other incomes. These other sources of incomes can be
fixed deposits with banks, insurance commissions, house properties, etc. The
Form 16A is provided by the tax deductor and there will be as many Form 16As as
there are deductors for you. For example, if you have fixed deposits with two
different banks and TDS is deducted by both, the two banks will issue separate
Form 16As to you.
This is why the Form 16 is an integral document to be able tofile your tax returns. You should file your returns even if your employer doesn’t issue a
Form 16 after deducting TDS. This is the employer’s mistake and they will face
penalties for the same. It is your responsibility to file your tax returns when
you earn income that is above the taxable limit and the Form 16 can help you do
that with ease.
2. Which form to fill If you using the online platforms, this is an
automated process. "The correct ITR form gets selected automatically on
the basis of the information provided by the taxpayer," However, if you are using the government site, you need to
know which form is for you. Each form has it's limitations. For one, you may
have income from salary only but you can't file ITR 1 if you own more than one
house or have gained from trading in shares. If you own more than one
house and do not have capital gains or foreign income or assets, you can file
ITR 2A. Similarly, ITR 4S is a much simpler form to fill compared to the bulky
20-page-long ITR 4, if you have income from a business or are a freelancer. If
you choose ITR 4S, there is no need to maintain books, profit &loss
statements or audits. You don't have to pay advance tax either. However, your
business's gross receipts or turnover of the business should not be more than
Rs 1 crore and it should not be registered as a company. Your tax liability
would be calculated on the basis of a 'presumed business income', irrespective
of what your actual income may be. Section 44AD of the Income-Tax Act says
under the presumptive method, the net income is estimated to be 8% of gross
receipts for businesses. This year onwards, even freelancers earning less than
Rs 50 lakh per annum can also file ITR 4S. "A new section has been
inserted in the I-T Act Section 44ADA under which professionals with
receipts of Rs 50 lakh or less could opt for the presumptive scheme. Their
income shall be assumed to be 50% of their receipts,".
3. TDS and Form
26AS You need to cross-check your TDS deductions
with the figures reflected in Form 26AS, especially if you have interest income
from bank deposits or any other sources. Form 26AS also records interest income
in cases where Form 15 G/H is submitted by the taxpayer. So, in case you have
erroneously submit these forms where there was a tax liability, you should
make corrections. "The taxpayer should add this interest income to the
list of 'income from other sources' and compute the tax liability calculated as
per tax slab rate," says Sankla. Form 26AS can be downloaded from the
TRACES site. The tax department's e-filing site also provides a link.
However, be careful while selecting the Assesment Year (AY). "Taxpayers
get confused between Assessment Year (AY) and Financial Year (FY) and they end
up filling up wrong year's data in the return form. This may result in a huge
tax demand due to tax credit mismatch," .
'Income from Other Sources' , capital gains Once you have figured out Form 16, it is
merely copying figures from it on the ITR Form. But if you have income from
other sources you need to be careful. Lately, the sleuths have become vigilant
and you may end up with a notice. Typical incomesunder this head
include interest on bank or other deposits, taxable dividends, income from
securities by way of interest, pension received by the legal heirs of an
employee, income from subletting, winnings from lotteries, races and gambling.
Do not miss out reporting income from a second house. Even if it is not rented
out, you have to pay a tax on the basis on 'deemed income'. Good thing is that
if you have incurred any specific expenses for earning any of the above income
then you can claim deduction for the same too. Capital gains or losses is
another section where taxpayers tend to make mistakes. Capital gains/losses
have to be reported in Schedule CG of form ITR 2.
5. How to e-verify
You may have filed your returns on time but the tax-filing process is
incomplete if ITR-V doesn't reach the department within the stipulated time.
You won't get your refunds and worse, your returns filing won't be considered
valid if the department doesn't receive a signed or verified copy of ITR V
within 120 daysof filing the
returns. Apart from mailing the ITR V to the CPC in Bengaluru, you can now
e-verify by linking your Aadhaar or through netbanking. For Aadhaar-linked
verification, you have to be registered on e-filing site and provide your
Aadhaar number. Once the validation is done, you will receive an OTP (which
will be your electronic verification code) on your Aadhaar registered mobile
number, which will be valid for the next 10 minutes. Submit this to
e-verify your ITR V. In case your PAN and Aadhaar details don't match or you
are still not registered under UIDAI, verify using your netbanking account.
Best TAX advice for Freelancers, Professionals, Trader and Web based agencies.