Form 16 is an Income Tax form used by companies to provide their salaried individuals in India. This form carries all the required details that help the employee in filing their tax returns with the Income Tax department in India. The Income Tax Act of 1961 and the Income Tax rules of 1962 are the laws that are prevailing in India. When Form 16 is provided to an employee by their employer it’s a source of proof of filing their Income Tax returns, the form has various components such as Salary Income components of the employee. Every employer should provide their employees with the Form 16 who fall under the tax brackets set up the Finance Ministry of the Government of India. If an employee doesn’t fall under the tax brackets set, then he/she doesn’t receive the Form 16 as he/she will not need to pay taxes neither will they need to have Tax Deducted at source or TDS.
Showing posts with label How to prepare Income Tax Form 16. Show all posts
Showing posts with label How to prepare Income Tax Form 16. Show all posts
Sunday, 10 July 2016
Sunday, 26 October 2014
Click above to download the Automated Form 16 with Form 12 BA for FY 2014-15
Form 16 is a certificate issued by an employer to all his employees for a particular financial year at the end of the said year reflecting the total salary paid and amount of tax deducted (‘TDS’) during the year. For a salaried employee, Form 16 is of utmost importance from income-tax point of view as it forms the base of his / her income-tax return.
As per the CBDT new Notification the Form 16 now it's Two Parts, One is Part A [where details of Tax Deduction and deposited to the Central Govt with PAN AND TAN Number], Another is Part B [ where the details of Salary of employees]
Contents of your Form 16 – Part A
Part A of your Form 16 will be the TDS certificate issued by your employer. It determines the total amount paid to you during the year and amount of tax deducted and deposited by the employer in your name with the Indian Government Treasury. However, this certificate is valid only if it reflects all these following details:
Heading – Certificate under Section 203 of the Income Tax Act, 1961 for tax deducted at source on salary
- Certificate number
- Your name and address and also that of your employer
- Your Permanent Account Number (‘PAN’) and that of your employer
- Tax Deduction Number (‘TAN’) of your employer
- Range of Commissioner of Income Tax (TDS) [‘CIT(TDS)’]
- Assessment Year (AY 2013-14 in this year’s certificate)
- Period for which the certificate belongs to (April 1, 2012 to March 31, 2013 in this certificate)
- Quarter wise details of amount paid to you, receipt numbers of the quarterly TDS returns filed by your employer, TDS amount deducted and deposited by your employer in your name
BSR code of the bank branch, date on which TDS was deposited, Challan serial number relating to each amount of tax deposited by your employer
Status of matching with Oltas – it should reflect as ‘F’ (indicating final). In case it reflects ‘U’ (indicating unmatched), immediately inform the employer of the same else appropriate credit shall not be available to you
Verification details of the employer
All the pages of Part A of Form 16 should have been digitally signed by the employer. If not digitally signed, the same should have been at least manually signed by the employer
Contents of your Form 16 – Part B
Part B of Form 16 is usually Annexure to Part A. It reflects your detailed salary components, taxability of the same and the total amount of tax payable by you for the year against which TDS has been deducted and deposited by your employer. The contents of Part B are as under:
- Gross Salary
- Exempted allowances under Section 10 of the Income Tax Act – conveyance allowance, house rent allowance, medical allowance, children education and hostel expenditure allowance, etc
- Deductions allowable from the salary income – entertainment allowance and professional tax
- Total income chargeable under the head ‘Salaries’ based on the above figures
- Your any other taxable income, provided it is reported by you to the employer
- Tax saving deductions that you are eligible for like PPF, LIC, Mediclaim, interest on education loan, etc, provided the same are reported by you to the employer
- Tax on total income payable by you – This shall be the amount of TDS that the employer would have deducted from your salary. However, it is possible excess or short TDS may have deducted by your employer. In such a case, the excess amount should be claimed by you while filing your return, whereas short amount should be paid by you at the time of filing the return
- Verification details of the employer
- Digital / manual signature of the employer
Form 12BA
Form 12BA is a statement showing particulars of perquisites U/s 17(2), other fringe benefits or amenities and profits in lieu of salary thereof granted by your employer to you during the year. Perquisites (or perks) are additional monetary / non-monetary benefits that you may have been granted throughout the year like rent free accommodation, interest free or concessional loans, etc. Profits in lieu of salary means any payment due to or received by you from your employer in connection with or at the time of termination of employment or modification in terms and conditions relating thereto like gratuity, pension, etc. The form also confirms the amount of tax deducted from your salary and paid into the Government Treasury by your employer. The statement should also contain declaration from the employer that the figures stated in the form are correct and accurate as per their books of accounts.
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