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.
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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.
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:
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.
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* Minimum of 10 employees required.
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.
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|
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.
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.
If you are an employer, it is compulsory to issue Form 16 to the employee.
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.
Form 16/16A is issued by the employers to the employee within 15 days of filing their fourth-quarter TDS returns.
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.
Form 16 can be downloaded from the TRACES portal by the employer before giving it to the employee.
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.
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.
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.
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.
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.
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.
You will be able to file Income tax returns without Form 16 as it is not one of the important forms.
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.
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.
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.
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.
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