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Form 16 Issuance to Employees

Form 16 is a certificate that employers issue to their employees. It is a validation that the TDS has been deducted and deposited with the government authorities on behalf of the employee of the organization.

Form 16 gives a detailed summary of the salary paid to the employees and the deducted TDS. TDS Form 16 contains all the information that an individual needs to prepare and file the income tax return.

The employers are required to issue a Salary TDS certificate every year on or before the 15th of June of the coming year immediately after the financial year in which the tax is deducted. There are two components of Form 16 Part A and Part B. If an individual loses Form 16 he can request a duplicate Form from the employer.

IndiaFilings can help you manage TDS compliance online. Our TDS experts will help you file all the TDS returns pay any overdue TDS deposits and also the issuance of Form 16 to the employees.

Structure of Form 16

Part A of Form 16

It provides the details of the TDS that is deducted and deposited. This form can be generated by the employers through the TRACES portal.

The employer must verify the contents before issuing the certificate. Here are a few components of Part A of the salary TDS certificate.

  • Name and address of the employer
  • TAN and PAN of employer
  • PAN of the employee
  • Summary of tax deducted and deposited quarterly, which is certified by the employer.

Part B of Form 16

It is an annexure to Part A, Part B is prepared by the employer for its employees and it contains details of the breakup of the salary deductions approved under Chapter VI-A. In case of a job change in one financial year, Form 16 should be obtained by both employers. Some of the components of Part B are:

  • Detailed breakup of salary
  • Detailed breakup of exempted allowances under Section 10
  • Deductions that are allowed under Income Tax Act (Under Chapter VIA)

Here is the list of deductions

  • Deduction for life insurance premium paid, contribution to PPF, etc. under Section 80C
  • Deduction for contribution to pension funds under Section 80CC
  • Deduction for employee's contribution to a pension scheme under Section 80CCD(1)
  • Deduction for taxpayer's self contribution to a notified pension scheme under Section 80CCD(1B)
  • Deduction for employer's contribution to a pension scheme under Section 80CCD(2)
  • Deduction for health insurance premium paid under Section 80D
  • Deduction for interest paid on loan taken for higher education under Section 80E
  • Deduction for donations made under Section 80G
  • Deduction for interest income on savings account under Section 80TTA

TDS on Salary

TDS is calculated on the income tax rates that are prescribed for the financial year in which the payment of the employee is made. An individual responsible for paying the taxes can increase or decrease the amount that is deducted based on any adjustments in the previous deficiency or excess deduction.

The total amount of the TDs will be determined by the following elements:

Exemption Limit Leave Encashment Notified Allowances
House rate allowance Perquisites Donation by employees under 80G
Other deductions Bonus or incentives Estimated Salary

If an individual is employed by more than one employer during a financial year then tax will be deducted on the aggregate salary by one of the employers as chosen by the employee by submitting information in Form 12B.

Thus if an employee has more than one employer in a financial year then he is required to furnish information in Form 12 B to one of the employers. Once Form 12B is submitted it becomes an obligation for the employer to deduct TDS.

Pay as you go grow pricing

Pricing for Employees

Basic

200

Per employee

  • 1 - 25 Employees
  • 4th Quarter TDS Filing or Verification
  • Annexure II Filing or Verification
  • Form 16 Generation & Issuance
  • ITR-1 Filing for Employees

Premium

300

Per employee

  • 101 - 500 Employees
  • 4th Quarter TDS Filing or Verification
  • Annexure II Filing or Verification
  • Form 16 Generation & Issuance
  • ITR-1 Filing for Employees

* Minimum of 10 employees required.

Deposit of Tax to Government by Employers

The deducted tax from the employees' salary should be deposited by the employer along with an income tax challan ITNS 281 on or before the 7th of every month for the previous month.

Recently, from 2008 all the corporate assessees and assessees are subject to tax audit are required to make all the TDS payment online through an internet banking facility.

An assessee can also make payment of taxes from the account of any other person. However, the challan for making should indicate the PAN of the assessee on whose behalf the payment is made.

Due Date for Filing TDS Returns by Employers

TDS return must be filed with the Government every quarter as follows:

Quarter The due date for filing TDS return
April- May - June July 31st
July- August- September October 31st
October - November - March January 31st
January - February - March May 31st

Annexure-II of TDS Return in May 31st

In the TDS return filed by employers on May 31st, various details about the employee must be furnished by the employer along with details of TDS deducted and deposited. Annexure-II of the TDS return has various data-points and must be prepared carefully by the HR and Accountant of the business.

Issuance of Form 16 to Employees

After the TDS returns are filed by the employer, the Government would issue TDS certificates to the employer - which in turn is provided to the employees.

Form 16A provides details about TDS from salary. Form 16B provides details of TDS Other than salary, Form 16C for TDS under Section 194-IB, Form 16A for TDS from other than salary, and Form 27D for TCS.

The due date for issuance of Form 16 is on or before June 15th of the financial year immediately following the financial year in which the tax is deducted. In the case of Form 16A, the same should be issued every quarter.

Frequently Asked Questions

Is it mandatory to file Form 16 for employees?

If you are an employer, it is compulsory to issue Form 16 to the employee.

What is the importance of Form 16?

Form 16 is issued to the salaried individuals from their employer when he deducts the tax from the salary of the employee. It is an acknowledgment that states that the deducted tax has been deposited with the Income Tax Department.

How much time will get to obtain Form 16?

Form 16/16A is issued by the employers to the employee within 15 days of filing their fourth-quarter TDS returns.

What if the employer doesn’t give Form 16?

If the employer fails to provide Form 16 after deducting the TDS then the minimum penalty that the employer will pay is Rs 100 for every day the default continues.

How to download Form 16 for salary?

Form 16 can be downloaded from the TRACES portal by the employer before giving it to the employee.

Is Form 16 available online?

Form 16 can be downloaded from the online website of the Income Tax Department, this document is typically issued by the employer for the current financial year and reflects the total earning and the income taxes that are applicable for the financial year.

Is issuing Form 16 if the TDS is not deducted?

The employer is required to mention the salary details of an employee even if it is nil TDS deduction while filing their TDS returns. So the system-generated Form 16 is issued to the employees.

What is the minimum salary to get Form 16?

Every salaried individual who comes under the taxable bracket is eligible for Form 16 if the gross total income is exceeding Rs 2.5 lakhs. You need to pay tax and you are eligible for Form 16.

Is Form 16 necessary while filing a return?

Form 16 happens to be the most important document to file the income tax return. Form 16 carries various details of the salary paid, the house property, another source of income, deductions, and the tax paid or the deducted. Hence, it is necessary to have Form 16 before filing the income tax return.

How to check deductions in Form 16?

Part A enables one to view the taxes deducted from the monthly salary. It can be cross-checked with the salary slips. The CAs advise matching the deducted tax details shown in Part A OF Form 16 with the Form 26 AS.

How to get Form 16?

Form 16 can be obtained from the employer. The employer will provide Form 16 even if you are not employed with the employer anymore. This Form 16 cannot be downloaded.

How to file returns if I don't have a Form 16?

You will be able to file Income tax returns without Form 16 as it is not one of the important forms.

In case there is no TDS then is the employer required to issue a Form 16?

When the TDS has been deducted a TDS Certificate is issued in Form 16. If no TDS has been deducted by the employer then he may not give a Form 16.

What if the employer has deducted the TDS and not issued Form 16?

The Income Tax Act states that every person who is deducting the TDS needs to furnish a certificate with the details of the TDS that is deducted and deposited. The employer needs to furnish a certificate in Form 16 mandatorily in the format of Form 16.

What happens if Form 16 is filled incorrectly?

If Form 16 is issued with a mistake the same can be rectified by the employer at your request. A revised form will be issued by the employer once again.

Is there any difference between Form 16 and an income tax return?

Form 16 is just the document of the salary income so it is different from the income tax return. Further, it is not necessary to attach Form 16 with the income tax return filing.

Is Form 16 different from Form 60?

Form 60 is the declaration made by the individual who does not have a PAN whereas Form 16 is the income certificate that is issued by the employer to the employee.

Last updated: June 30, 2021

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