Introduction:

Employers in India supply Form 16 to all their salaried employees. It comprises all of the details that the employee needs to file his or her tax returns each year with the Indian Income Tax Department.

This article will provide everything you need to know about Form 16.

What are the Form 16 types?

Form-16 comes in two varieties, namely, A and B

  1. Form 16-A:

    This document summarises the tax deducted by the business or employer from the individual’s wage and submitted to the Income Tax Department. This document is being completed on the employee’s behalf.

  2. Form 16-B:

    Part-B is a comprehensive statement that contains information such as the employee pay, deductions (if there is any), as well as any additional income revealed.

What are the parts of Form 16 ?

Form 16 can be divided into two parts: A and B

  1. Part A of Form 16

    Your employer must offer authentication before the certificate may be issued. If you change jobs, the new company must also produce a Form 16. Form 16 must be provided by each new employer. Part A’s essential components are listed below:

    1. Name of your employer
    2. Address of your employer
    3. PAN Details of your employer
    4. Information of the tax is subtracted and submitted on a quarterly schedule.
  2. Part B of Form 16

    The following components are included as an annexure to Form 16 Part A in Part B:

    1. Detailed Salary Breakdown
    2. Detailed Allowance Breakdown under Income Tax Act Section 10
    3. Allowance Deductions under Income Tax Act Chapter VI A
    4. Relief (if there is any) under Income Tax Act Section 89.

How to download Form 16?

Here is a step by step breakdown of the process of downloading Form 16 from the Income Tax Department Website.

  1. Go to the official website of the Income Tax Department.
  2. Click on ‘Income Tax Forms’ under the section of ‘Forms/Download’.
  3. Click on the PDF option under ‘Form 16’
  4. Form 16 will be downloaded as a PDF.

How Do I File Income Tax Returns with Details from Form 16?

As specified before, Form 16 contains all the details necessary for you to file your annual Income Tax Returns. Here are all the information provided in the document that you will need when filing your tax returns:

  1. Exempt Allowances under Income Tax Act Section 10.
  2. Salary that is taxable.
  3. Detailed Breakdown of Deductions under Income Tax Act Section 16
  4. House Property Income provided for Tax Deducted at Source
  5. Other Source Income provided for Tax Deducted at Source
  6. Detailed Breakdown of Deductions under Income Tax Act Chapter VI A which covers Section 80C, 80CCC, 80CCD(1), 80CCD(1B), 80CCD(2), 80D, and 80E.
  7. Deductible amount aggregate under Income Tax Act Chapter VI A which covers Section 10(A), 10(B), 10(C), 10(D), 10(E), 10(F), 10(G), 10(H), 10(I), 10(J), and 10(L).
  8. Due Refund or Payable Tax

Other additional details that you can gather from Form 16 needed to file your annual income tax returns include

  1. Amount of TDS deducted by your Employer
  2. Your Employer’s TAN
  3. Your Employer’s PAN
  4. Your Employer’s Name
  5. Your Employer’s Address
  6. Current Assessment Year
  7. Your Name
  8. Your Address
  9. Your PAN Details

What are the deductions that can be filed in Form 16?

Certain areas on Form 16 are indicated for deductions. They are listed below:

Deduction

Contributions

Income Tax Act Section 80C

Life Insurance Premiums, Public Provident Funds

Income Tax Act Section 80CCC

Provident Funds

Income Tax Act Section 80CCD(1)

National Pension Scheme by both self-employed and salaried individuals

Income Tax Act Section 80CCD(1B)

Additional 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

Educational Loans

Income Tax Act Section 80G

Donations or Charitable Organisations

Income Tax Act Section 80TTA

Savings Accounts

Who is eligible to receive Form 16?

Form 16 is available to every salaried individual whose taxes has been deducted at the source by their employer. Regardless of whether their income comes within the tax exemption level, an employer must provide a Form 16 to their employees if they have deducted TDS.

What should you do if your company deducts TDS but does not supply Form 16?

In India, all employers are required to produce Form 16 if tax is deducted at the source. You can ask your company to provide you with Form 16. You may also verify if your company has submitted the deducted TDS amount to the Central Government by visiting the TRACES site and downloading Form 26AS.

If your company hasn’t submitted the tax amount, you must pay it yourself, therefore return to the last step. Though it’s a time-consuming process, Form 16 will allow you to file your tax returns on time.

How do you compute your wage if you haven’t received Form 16?

Employers may fail to supply Form 16 to individuals whose yearly pay is less than the minimum taxable threshold of 2,50,000 INR. If you want to submit your annual tax returns without the usage of Form 16, you’ll need to rely on your bank statements, paystubs, house loan or college loan documents, tax-saving investment documents, Form 26AS, and other documents. 

Your pay stubs will include information about your basic pay as well as any allowance included, whereas Form 26AS will include information about all the tax amounts you have paid up to then as well as the amounts of deducted TDS.

What are the advantages of Form 16?

The following are some of Form 16’s advantages:

  1. Form 16 serves as the person’s ‘income from salary’ declaration.
  2. Form 16 is useful while submitting income tax returns each year.
  3. Form 16 is a document used to justify the issue of a visa.
  4. Form 16 serves as income proof.
  5. Form 16 aids in keeping track of all the tax-saving investments.
  6. Form 16 provides a comprehensive representation of your tax calculation, payment, as well as refunds.

Conclusion:

Submitting your annual income tax returns can be considered as one of the critical things you must accomplish, thus Form 16 is essential. Form 16, is among the most significant tax documents and covers the majority of the details needed to file your annual tax returns. Form 16’s many components allow you to expedite the procedures for submitting your Income Tax Returns. As a result, it is critical to thoroughly comprehend Form 16 and the complexities of the documents.


FAQ’s

The TDS Centralized Processing Cell is in charge of generating Form 16 based on the assessment of quarterly Tax Deducted at Source and Tax Collected at Source statements. A deductor must apply to the document on the official TRACES site.


Yes, you must contact your deductor in order to obtain a copy document.


In the case of a pensioner, Form 16 will be issued by the bank which the individual gets the pension from. The prior company will not be providing Form 16.