What Is Form 16? – Definition, Importance, Eligibility, Download, and More

Do You Understand The Importance Of Taxation? 

If yes, then you must know about Form 16. Every salaried employee and employer should have knowledge about Form 16. It is proof of tax paid on time. It helps to verify the authenticity of the income of an employee, validated and recorded with the Indian government.

In this guide, we have covered each and every detail related to Form 16.

Let’s Start To Know More………..

What Is Form 16?

Form 16 is a required document that contains all details required to file the income tax returns of salaried employees. It has the information needed to prepare and file an income tax return. The company has to provide Form 16 to employees at the end of every financial year. If you lost Form 16, you could request a duplicate from your employer.

Form 16 shows the breakup of salary and the TDS amount deducted by the employer. Before Form16 is provided, authentication must be provided by the employer. 

Why Form 16 Is Required?

Reasons Why Form 16 Is A Crucial Document, 

• Form 16 works as proof that the company has deducted tax from your salary and deposited it with the government. 
• Form 16 is an important document that helps in the income tax returns filing process. 
• Form 16 is usually requested by banks and financial institutions when you approach them for loans. 

So, every salaried employee needs to file Form 16 for income tax return filing.

Types Of Form 16

There are 2 types of Form16. 

• Form 16A Or Part A Of Form 16

Form 16A gives a total summary of the tax collected by the organization from the salary of the employee and deposited with the IT Department of India. Employer submits this form on behalf of the employee. 

Some Of The Components Of Form 16A Are:

• Employer Name And Address
• Tan (Tax Deduction And Collection Account Number) And Pan ( Permanent Account Number) Of the Employer
• Employee’s Pan
• Details Of Tax Deposited And Deducted On Quarterly Basis Certified By The Employer

An employer can generate and download this part of Form 16 from https://www.tdscpc.gov.in/app/login.xhtml portal, or you can download Form16 from here.  

It is important to note that, In case you move to a new job, the employer will issue a separate Part A Of Form 16 for the period of employment.

• Form 16B Or Part B Of Form 16

Form 16B is an Annexure of Part A. It is a consolidated statement prepared by the employer for its employees. It includes important details such as salary break ups such as basic salary, deductions (if any), and any other income disclosed by the employee or employer under Chapter VI-A.

Some Of The Components Of Form 16A Are:

• Detailed Salary Breakup
• Detailed Exempted Allowances Under Section 10 Of The Income Tax Act In Detail
• Deductions Allowed Under The Income Tax Act Of Chapter VI A
• Relief Under Section 89 Of the Income Tax Act

Job Application Form – Know The Basics, Format, And Importance

The List Of Deductions Allowed Under The Income Tax Act Of Chapter VI A

• Deduction for health insurance premium under section 80D.
• Deduction for life insurance premium, PPF contribution under Section 80C.
• Deduction for pension funds contribution under section 80CCC.
• Deduction for employee’s contribution to a pension scheme under Section 80CCD (1) and taxpayer’s self-contribution to a notified pension scheme under 80CCD(1B).
• Deduction for interest paid on loan taken for education under Section 80E.
• Deduction for employer’s contribution to a pension scheme under Section 80CCD (2).
• Deduction for donations under Section 80G.
• Relief under Section 89.
• Deduction for interest income on saving account under Section 80TTA.

What Is The Eligibility Criteria For Form 16?

According to the regulations of the Government of India, every salaried individual whose income comes under within the tax brackets set is eligible for Form 16.   If an employee’s income does not fall under the tax criteria, they will not need to have Tax Deducted at Source (TDS). In certain situations, the company is not obligated to provide Form 16 to the employee.

It is not mandatory for them to submit Form 16 who don’t file tax returns. Some employers issue certificates so that they a track their earnings.

Details Required For Filling Form 16 Returns

Certain information is required for filing your income tax return for FY.

• Salary breakup of deductions under Section 16
• Allowances exempt under section 10
• Income from the property reported by the employee and offered for TDS
• Taxable salary
• Tax payable due
• The aggregate of deductions under Section 80C

Points To Be Noted In Form 16

• All the details mentioned in Form 16 must be correct and it is the individual’s responsibility.
• If any of the details are incorrect in Form 16, the individual should reach out company payroll/ HR or finance department and get corrected.
• An individual should verify all the details such as salary, TDS amount, etc mentioned in the form.
• The employer or organization would then correct their end by filing a revised TDS return to credit the TDS amount against the correct PAN.

How To Download Form 16?

You can get your Form 16 PDF from the company owner. This Form 16 cannot be downloaded from anywhere. You need to take it from the employer. Even if you have left your job, your new employer will provide you with Form 16.

The Procedure To Download Form 16 PDF From The Official Income Tax Website Is:

• Visit the official Income Tax Department website: https://www.incometaxindia.gov.in/Pages/default.aspx.
• You will find the ‘Income Tax Forms’ option, under the ‘Forms/Download’ section, just click on it.
• You will find the ‘PDF’ option and ‘Fillable Form’ options available under ‘Form 16’.
• You have to select the relevant option at your convenience.
• You will be able to download the form on the next page.

You can download the Form16 from UBS HR Toolkit.

How To File Income Tax Return By Using Form 16?

As we talked about above, you have to download the Form from the relevant sources and fill in the required details necessary. Details to be added are already discussed such as salary breakup, exempt allowances, income from house property, other sources, etc. You need to fill in the details, verify it, and if found error then gets corrected after contacting HR or the financial department of a company.

What Are The Benefits Of Form 16?

Benefits Of Form 16 Are:

• Form 16 acts as proof of income.
• Form 16 helps to fill income tax returns.
• Form 16 can work as a supporting document for the issuance of a visa.
• Form 16 acts as the income from the salary statement.
• Form 16 provides a clear picture of payment, computation, and refund of your income taxes.

Conclusion

As an employee or employer you must have some government docs with you, and they should be submitted on time for compliance management. UBS- HRMS & payroll software that streamlines your payroll with all government rules and regulations. It helps to directly submit Form 16 on your behalf and saves your time and effort.

Moreover, you should have knowledge about Form16, Form 16A & Form16B. Here we described all the details regarding the return of tax filing under Form 16, you can check & download the PDF form from the website HR Toolkit.