Form 16 - Income Tax

Form 16 is the format which an employer should use for the purpose of issuing an acknowledgement of the TDS withheld on an employee's salary. Any person responsible for deducting tax at source (TDS) from salary is required to issue this form in the prescribed format to the employee. In this article, we look at Form 16 as described under the Income Tax Act. For a comprehensive guide on downloading Form 16 and obtaining additional information, please refer to our detailed article on Comprehensive Guide to TDS Form 16: Everything You Need to Know.

TDS Certificates

TDS certificates are issued by persons deducting tax at source (TDS). On deducting tax, a person who deducted tax is required to issue a certificate in the prescribed format to the employee or payee. The prescribed format varies according to the circumstances, as mentioned below:

• Form 16 is issued for TDS on salary.
• Form 12BA is a statement of the value of perquisites and profit in lieu of salary.
• Form 16A is issued for TDS on other income.
• Form 16B is issued for TDS on purchase of immovable property.

Form 16 Format

Form 16 must be issued in the format specified under the Income Tax Act. Form 16 contains the following information on it:

• Valid permanent account number of the deductee
• Valid tax deduction and collection account number (TAN) of the deductor
• Book identification number or numbers where the deposit of tax deducted is without production of challan, in case of an office of the Government.
• Challan identification number or numbers in case of payment through bank.
• Receipt number of the relevant quarterly statement of tax deducted at source which is furnished in accordance with the provisions of Rule 31A.
• Receipt numbers of all the relevant quarterly statements in case the statement is for TDS from income chargeable under the head "Salaries"

The format for Form 16 is the following:

Due Date for Issuing Form 16

The form must be issued every year on or before the 31st of May for the financial year in which income was paid and tax was deducted. Form 16A must be issued every quarter within 15 days from the date of furnishing the statement of TDS as under:

• For April - June - 15th August
• For July - September - 15th November
• For October - December - 15th February
• For January - March - 15th April

Part A of Form 16

All tax deductors must issue Part A of Form 16 by generating and downloading the document through TRACES portal. Hence, all tax deductors and employers must have an account on TRACES for deducting tax on salary. Also, if an assessee is employed by more than one employer during a year, then each of the employers can issue Part A of Form 16 for the period employed and Part B may be issued by each of the employers or the last employer at the option of the assessee. Know about the Vivad se Vishwas scheme introduced by the Government as part of Budget 2020!

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Updated on: December 17th, 2024