Form 16 certificate also known as TDS
certificate is a financial statement issued by an
office of a salaried employee that contains earnings, deductions and “Income Tax" or "I-T” paid to the Government. This Form-16
certificate (TDS Certificate) must be issued to every employee
who comes under “Tax Deducted at Source - TDS”, by his / her employer in the end of
each financial year.
All the salaried employees
should use Form 16 certificate as a supporting document for I-T
Return in India. If you have worked in two different
organizations in the same financial year, you must collect separate Form16
certificates from
both the organizations in order to submit your I-T
Return.
Even if
your earnings not come to the barrier of TDS, you are entitled to get the Form16 document or
also known as
TDS certificate upon
request. In some situations like, availing bank loan for house or
car etc., bank may ask to submit Salary certificate(link is external) and Form 16 as evidence of your earnings,
deductions and net income from the company.
Definition
of Form 16 Certificate in terms of I-T Department, Govt. Of India
Form 16 is a Certificate issued to an employee by his officer under section 203
of the Income-tax Act, 1961 for Tax deducted at source from income chargeable
under the head “Salary”.
Form 16 certificate must have
details of the Tax Deducted at Source (TDS) by the company on behalf of employee.
Tax Deducted at Source: TDS is a tax levy to be retained by a third-party
payer (employer or officer who authorized to issue form-16 certificate) over
the revenues paid to the person concerned, the tax due in respect of the same income.
Tax deducted at source is the normal taxation the income of most of the
countries.
Tax-deduction Account Number: TAN is
the authorization number that an employer or officer should get from the income
tax department prior collecting TDS. It is TAN holder’s responsibility,
obtaining TDS from an employee’s salary and the same amount to be paid to the
government as collective tax on behalf of its employee.
Employee should use the form-16 certificate for
filing the Income Tax (I-T) return every ending of financial year.
Structure
of Form 16 Certificate (Tax Certificate)
Now we will look into the format of Form-16
certificate and what are the data to be specifically shown on the Form 16
format structure:
1.
First part of
the form-16 format requires the primary information about employer (who
collected the TDS) and employee. It must have address, designation, PAN,
TAN, period of the TDS, Assessment year and acknowledgement numbers of all
quarterly statements of the TDS received from I-T department.
2.
Second part of
the Form-16 template requires
the details of the salary paid by the employer, other income reported by the
employee and Tax deducted at the source.
And finally, all the data given in
this “Form-16” certificate must certify the issuing officer with signature,
date and office stamp
