Form 16 Issuance to Employees

Any person responsible for paying salary is required to deduct tax at source on the amount payable and issue Form 16 to the employees at the end of each financial year. At IndiaFilings, we can help you easily manage your TDS compliance online through our platform. After subscribing to our services, our team of TDS experts will help you file all TDS returns, pay any overdue TDS deposit and issue Form 16 to your employees. IndiaFilings has experience working with large organizations and issuing salary TDS certificates in Form 16 to thousands of employees.

TDS on Salary

TDS is calculated at the income tax rates prescribed for the financial year in which the payment to employee is made. The person responsible for paying can increase or decrease the amount to be deducted based on any adjustments in previous deficiency or excess deduction. The total amount of TDS each month will be determined by the following elements:

Exemption limit Leave encashment Notified allowances
House rent allowance Perquisites Donation by employees u/s 80G
Other deductions Bonus or Incentives Estimated Salary

If a person is employed by more than one employer during a financial year, 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 in an employee has more than one employer in a financial year, he/seh is required to furnish information in Form 12B to one of the employers. After submission of Form 12B to an employer, it becomes the obligation of the employer to deduct TDS.

Deposit of Tax to Government by Employers

The tax deducted from the employees salary must be deposited by the employer along with an income tax challan ITNS 281 on or before 7th of every month - for the previous month. From 2008, all corporate assessees and assessees subject to tax audit are required to make the TDS payment online through internet banking facility. An assessee can also make payment of taxes from the account of any other person. However, the challan for making payment should clearly indicate the PAN of the assessee whose behalf the payment is made.

Filing of TDS Return by Employers

Employers are required to file quarterly TDS returns with the Government providing details of tax deducted from salary. Information about tax deduction from salary under Section 192 is filed in Form 24Q. The employer at the time of filing TDS return would file the following information to the Government.

  • TAN of the employer
  • PAN of the employer
  • PAY of the employee
  • Details of tax deposited with Government with challan identification number
  • Amount if any paid to employees without TDS

Due Date for Filing TDS Returns by Employers

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

Quarter Due Date for Filing TDS Return
April - May - June July 31st
July - August - September October 31st
October - November - December 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

Once the employer files the necessary TDS returns, the Government would issue TDS certificates to the employer - which in turn is provided to the employees. Form 16 provides details about TDS from salary. Form 16B provides details of TDS under Section 194-IA, 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 case of Form 16A, the same should be issued every quarter.

Salary TDS Certificate in Form 16

The new salary TDS certificate in Form 16 contains two parts namely Part A and Part B.

Part A contains information of employer like name, address, PAN/TAN of employer. Employer information like PAN, assessment year, period of employment, address of communication, summary of TDS return filed, salary paid, amount of TDS and details of TDS deposit.

Part B includes details of salary paid, other incomes, amount deductible under Chapter VI-A, taxa payable and relief under section 89. Part B also includes a separate verification. In verification, the deductor will certify that salary/tax details are complete and correct on the basis of account books and other available records.

If a person is employed by more than one employer, then each of the following will issue Part A of Form 16. Part B can be issued by both or the last employer.

Form 16 with Digital Signature

Part A of Form 16 can be issued only by downloading it from the TRACES Portal. Part B of Form 16 can be manually prepared by the employer. Before issuing Part A and Part B of Form 16 to employees, the employer is required to authenticate the correctness of contents.

Pay as you go grow pricing

Pricing for Employees

Basic

200

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

Premium

300

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

* Minimum of 10 employees required.

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