All you need to know about Form 16

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Introduction

Form 16 is provided by the employer to the employee. It contains the details of the amount of tax deducted at source (TDS) from an employee’s salary. Employees need Form 16 while filing their income tax returns (ITR) with the IT department. Employers are required to provide Form 16 at the end of every financial year to taxpaying employees under Section 203 of the IT act.

Form 16 contains all the details about the basic pay, the tax deducted by the employer and its submission date to the IT department. Please keep in mind that if you have switched jobs with tax deducted at all the workplaces, you should get a different Form 16 for each.

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What Constitutes Form 16

The various elements that you will find in form 16 are:

  • Refunds or balance about taxes payable

  •  Employer’s TAN and PAN details

  •  Tax payment details

  •  Employee’s personal details

  •  Tax deduction details as per section 191A

  •  Details about salary

  •  TDS receipt

 Form 16 Part A

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The employer issues Form 16 Part A containing:

  • Name and address of the taxpayer
  • PAN and TAN of the employer
  • PAN and Reference Number of taxpayer
  • Financial year and period of employment
  • Total TDS deducted and deposited for the year

Form 16 Part B

This form contains detailed break-up of the tax amount as per the investment declarations made by you at the start of the financial year and document proofs submitted during ITR filing. The various components of Form 16 B are:

  • Basic salary details

  • Details about allowances

  • Information about tax deduction

  • Other income declared by employees and deductions against such income.

  • Employee’s net tax liability

  • Employer verification

 

 Difference between Form 16 A and Form 16 B

Form 16 A is the TDS certificate issued for income other than salary, constituting accruals from returns against fixed deposit investment, mutual funds, gold bonds, and other forms of capital gain. Form 16 B, on the other hand, certifies tax that has been deducted from income accruing from the sale of immovable property (building or a part of it and land).

Who is eligible for Form 16?

The Ministry of Finance guidelines stipulate that any salaried individual whose tax is deducted by the employer is eligible to get Form 16. A company need not Issue Form 16 for employees whose salary is below the taxable limit. However, many companies issue the form even to employees outside of the tax bracket as it is a convenient way of providing consolidated information concerning employees’ total earnings.

Advantages of Form 16, Form 16 A, and Form 16 B

Form 16

  • Details contained in the form are required at the time of filing income tax returns.
  • It helps verify that the right amount of tax was deposited according to the information contained in the form.
  • Acts as proof where required.
  • It can be used when applying for loans as it is accepted as valid income proof in financial institutions.
  • Helps employers calculate the correct tax liability for the employee in question.
  • It is also required to obtain international visas to travel.

Form 16 A

  • The TDS and income data contained in Form 16 A assist taxpayers in filing their income tax returns and calculating the tax as applicable per their income.

Form 16 B

  • The form provides evidence that TDS has been deducted from the proceeds of a property sale by the buyer and duly deposited with the income tax department.

 How to download Form 16, Form 16 A, and Form 16B?

 

Form 16

Step 1- Go to http://www.incometaxindia.gov.in/Pages/tax-services/form-16A-download-deductor.aspx

Step 2 – Log in with your credentials.

Step 3 – Scroll to the Downloads Tab and select the “Income Tax Forms” option

Step 4 – There, you will find Form 16 with two options, ‘PDF’ and ‘Fillable Form’

Step 5 – In the case of individual PANs, select the financial year for which Form 16 is needed, enter the PAN number, click on Add and hit enter to the go option,

Step 6 –  Finally, click on Submit to Download Form 16

Form 16 A

Step 1- Login to the TRACES website with a user ID (PAN) and password.

Step 2- Scroll to Downloads and click on Form 16 A.

Step 3- Enter the details and click on Go.

 

 Form 16 B

Step 1- Log in to https://www.tdscpc.gov.in/app/tapreg1.xhtml

Step 2- Click on Register New User and complete the formalities.

Step 3- Once the details are validated, you can create an account with your PAN as the user ID and a password of your choice. An automatically generated email will be sent with an activation link, and the second code will be texted to your registered mobile phone. To download Form 16 B, you need to scroll to download and click on ‘Request for Form 16 B,’ validate the details and submit the request. After some time, click on download and save it to your computer.

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