Under Sec.203 of Income Tax Act; employer has to issue Form-16 certificate to his employee.Form 16 serves as an Important proof of the tax deducted by the employer & paid. It helps the assesses in filing his income tax return
Contents of Form 16?
Form 16 basically consists of 2 parts- Part A & Part B.
• Employees name & address.
• Employers name & address.
• PAN of employee
• PAN & TAN of employer
• Period of employment.
• AY to which that certificate pertains to.
• Summary of the taxes deducted & paid into the govt. account by the employer.
Part-A of the Form-16 consists of summary of tax deducted from your salary & deposited with the government as per monthly & quarterly returns filed by the employer.
It is an annexure which contains all further details of salary paid; other income; deductions; tax due & tax paid. This is a statement of full salary; deduction; exemptions computed as per Income tax act.
• Gross salary
• Exemptions claimed under sec. 10 of IT act
• Net taxable salary
• Income from House property
• Income from any other sources.
• Gross total Income.
• Deductions claimed chapter VI-A of IT act
• Taxable total income
• Amount of tax payable on Income
• TDS deducted.
How to get form 16?
• It is generally issued by employer at the end of each Financial year by 30th may.
• Else u can download it from Income tax department website.
How to download form 16?
• Go to traces website
• Register as tax payer by entering your PAN; Name; DOB; tax deducted details etc.
• Go to downloads and select form 16.
• Select relevant FY and click download.
In case you have changed from one employment to another employment in the middle of FY; then you have to from 16’s from both the employers.
It is recommended that to submit your income from previous employments in the year to your current employer so that all the information will accumulate in a single From-16.
However; in Income tax return you have to declare tax deducted by each employer separately.
Uses of Form 16?
1. For filing of income tax returns.
2. Verification purposes – most banks & financial institutions use form 16 as part of their verification process when you apply for a loan.
Time limit for issuing Form 16?
• Employers are liable to issue Form-16 to employees by may 31.
• If failed they are liable to a penalty of Rs. 100 per day but cannot exceed the tax amount deducted.
In case no TDS has been deducted by the employer they may not issue you a form 16.
It acts as a proof of income & tax payment. It is a very important & useful document. Make a habit of keeping a copy of Your Form-16 in both physical and soft copy as soon as u receive it.