Form 16
is an income tax form.
This form is used to give the details of tax
deducted at source. The form 16 is only applicable for salaried
individuals. The form is filled by the employers and given
to the employee. The employer gives details of tax deduction in this form.
It is proof of tax deduction as well. The employee who has paid tax through the
employer must get the form 16. The form 16 has many information such as your
income details, the applicable exemption, availed deductions and tax payment
challan details. The form 16
is used to fill information while filing income tax return.
Download Automated Form 16 Part B for F.Y.2015-16 & A.Y.2016-17 [ This Excel based Software can prepare at a time 50 employees Form 16 Part B]
·
Every salaried Employee gets Form 16
from the employer.
·
The employers are bound to give form 16
to its employee.
·
The form 16 is like a receipt of tax deduction.
·
The employer deduct tax from the employee and deposits it to the the income tax department.
The form 16 maintains transparency and assures
that employer has deposited tax on your behalf.
·
Form 16
has all the details of your income, exemptions and deductions. It is an account
of your income and applicable tax.
·
It gives challan details of taxes paid on your
behalf.
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The form 16 is issued every year after the end
of a financial year.
Why Form 16 is Required
A person who
is employed with an organisation gets monthly salary. Such salaried person do
not pay income tax directly to the government. Rather the employer deducts tax
from the salary of the employee. The employer deposits this tax on your behalf. Now you may
ask following question to your employer.
·
How can you say that I am under taxable bracket.
what is the basis of tax deduction?
·
How did you calculate my tax liability?
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How would I know that your have really paid tax on
my behalf?
·
Did you consider my investments for tax deductions?
·
What is the challan details of my tax deducted at
source?
These
questions are genuine and you must get the answer. It is also important for the
credibility of government and employer. Thus government has made a provision to
give answer of these questions to every employee. You don’t not to ask for it.
Rather, every employer should give all the relevant information to its employee.
Indeed government has made a form ( Form 16)
which should be filled by the employer. This filled form would
give all the details of your income tax applicable taxes. Nowadays this form is directly printed by the
employer. Every form 16 contains similar information.
Download Automated Master of Form 16 Part A&B for F.Y.2015-16 & A.Y.2016-17 [ This Excel based Software can prepare at a time 50 employees Form 16 Part A&B]
Importance of Form 16
The form 16
is important for both the employer and employee.
·
The form 16 is the main document to file
income tax return. In the income tax return you have to fill the taxable
income, deductions and taxes paid. All these information is available at form 16.
·
It is the proof of tax deduction by the employer.
It can be produced to income tax department if there is any issue in future.
·
It is also used as the proof of income. Banks ask
forms 16 for home loan sanctions.
·
Form 16
is needed while processing visas. It is an important certificate for acquiring
Income Tax Clearance Certificate (ITCC) through IT Department.
Other Points
Form 16 is the certificate of Tax
deduction. If there is NO TDS deduction, then it is not mandatory to issue form 16.
If the
organisation does not have the TAN, it can’t deduct TDS. IN this case the
organisation would not issue the form 16.
The self
employed person can’t get form 16 as he/she is not an employee. Such
person should file income tax return with the information available.
Information Form 16 Contains
The form 16
has details about your income, deductions and taxes. Following are the specific
information given on form 16.
Download Automated Form 16 Part B for F.Y.2015-16 & A.Y.2016-17 [ This Excel Based Software can prepare at a time 100 employees Form 16 Part B]
Salary
Your employer provides the details
of your salary. There would be gross salary, Perks, allowances and other
deductibles. It would also tell income chargeable under the head Salaries. This
amount is used for tax calculation.
Tax Deducted At Source
The employer deducts tax every month
from your salary. But it deposits it to income tax department once in a
3 month. Thus, employer submits tax to the government four times. The details
of these tax payment can be seen in the form 16. There would be four entries of the
TDS payment. If there is not TDS deduction of first quarter, you would not see
any tax payment in the first row. You can verify this tax payment through
the income tax department. The form 26AS keeps all the details of tax payment
against a PAN.
ax Deductions
There
various expenses and investment which gives you the opportunity to cut the tax.
These expenses and investments are called as the deductions. Examples of such
tax deductions are investment in ELSS, PPF and EPF. These deductions are also
part of the form 16. Your employer takes the details of
these deduction from you. You would have given your tax saving details in the
start of financial year and in the January-February of every year.
You must report all the tax saving deduction to your employer as early as
possible. It will decrease your monthly TDS deductions.
Other Income
You can have income other than the
salary. It may be other
income, rental income or capital gains. The home loan interest is also a negative income.
The employer don’t have any direct relation with such income but you can report
it to the employer. It would make your tax deduction more accurate. If you
report it to the employer, It is also entered in the form 16.
Indeed all the information which affects your tax deductions become part of form 16.
Structure of Form 16
The form 16
is divided into two parts, the part A and Part B.
Part A of Form 16
The part A
of the form 16 consist basic information about the
employer and employee. It also includes the tax payment details. You would find
following information in Part of A of form 16.
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TDS deducted by the employer
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PAN of the employer
·
The current financial assessment year
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The employee PAN
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TAN of the employer
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The employee/tax payer’s name, address etc
·
Name and address of the employer
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Period of the employement
·
Receipt number of TDS deducted
·
Declaration by
the employer
Part B of The Form 16
The part B
of the form 16 contains all the details about your
salary. It tells about gross salary, perks, exemptions and deductions. You
would get following information on part B
·
Gross salary of the employee
·
Perquisites
·
Exempted Allowances
·
Other income if reported by the employee
·
Deductions under chapter VI A. It includes
deductions under section 80C, 80CCC,
80CCD. The EPF, PPF, ELSS, NSC, insurance and tuition fees expense is reported under this head.
·
Total taxable income
·
Due income tax
·
Payable tax or refund, if any
How to Get the Form 16?
The form 16
is issued by the employer. The employer issue this form after
the end of the financial year. Every employer must give form 16
on time as employee fill their income tax return on the basis of form 16.
Generally Form 16 is distributed in May and June
month. You have right to get the form 16 if there is any tax deduction from
your salary.
Use of Form 16 While e-Filing
The e- filing for salaried people has
become very easy. The form 16 becomes the backbone of e-filing of ITR-1. All the sensitive information required
to enter in ITR-1 is available in the form 16.
Therefore you might have observed
that CA asks only form 16 to file your income tax return.
From the TAN of the employer to tax deductions of employee, everything is
available on the form 16. The information about your salary
is authentic in the form 16 because none other than your
employer fills the form 16. You must take out the
amount of net taxable income, tax paid details and deduction from the form 16
to file income tax return.
However, you should be careful about
the deductions. You might have missed some deduction while giving declaration to the employer. If it is the case,
you must include the missed deduction while filing income tax return.
