Almost all working professionals are familiar with tax deductions. A tax contributes to the state’s revenue, and all people in the formal sector pay some tax depending on their income. You must have noticed that you receive your salary after deducting a certain amount. This is known as TDS (Tax Deducted at Source).
How do employees know that TDS has been applied to their salaries? In such cases, all employers give a certificate known as Form 16. What about people who have multiple sources of income? Do they also get Form 16? If you are unfamiliar with Form 16 and Form 16a, this article will help you gain a basic understanding.
What is Form 16?
Form 16 is a certificate issued by employers to their employees as proof that TDS has been deducted. It also shows that the government has received the amount. The form also gives a detailed account of the TDS and the salary paid to the employee.
Form 16 has two parts: Part A and Part B.
Part A of Form 16 gives information about the TDS and the employee’s PAN and TAN details. Part B is made by the employee’s employer and shows how the employee’s pay is broken down.
Components of Part A
- Employer details such as TAN, PAN, name, and address
- Employee details such as PAN
- Information about TDS is verified by the employer
Components of Part B
- A detailed breakup of the employee’s salary
- List of exempted allowances as mentioned under Section 10
Who is eligible for Form 16?
There are many professionals in the world. Each works in a different field. When there are freelancers, remote workers, interns, creators, etc., how does one know they are eligible?
The Finance Ministry of India laid down regulations specifying that all salaried individuals whose incomes fall within taxable brackets become eligible for Form 16.
However, if the employee’s salary does not fall under the tax brackets, then no TDS is deducted. In such cases, the employer is not obligated to provide the employee with Form 16.
Once you receive your Form 16, make sure to look for the following things:
- Check all details and personal information. If there are any errors, get them corrected.
- Always verify the deducted TDS amount and income.
If there are any errors, employees must contact the HR or Finance department of the organization at the earliest possible time and make the revisions.
Now that we know about Form 16, let us understand the meaning and use of Form 16a.
The difference between Form 16 and Form 16a is a small one. Both of them are certificates issued upon the deduction of TDS. However, Form 16a is used for TDS on other sources of income.
Can employees get a Form 16 even after they have left their job?
Yes. Employees are eligible to get a Form 16 from their previous employer.
Is Form 16 available for download?
No. You cannot download Form 16 from the Internet. You will need to contact the employer if you wish to collect it.
Can you file returns without Form 16?
Yes. There are other methods to file your Income Tax Return. Form 16 is just one of the ways. Even if you do not have Form 16, you can file your return through other means. Your salary slip is one of them.
Is Form 16 given when TDS is not deducted?
Form 16 is proof of the deduction of TDS from the salary. If no TDS was deducted, then the employer is not required to give Form 16.
Can an employer deduct TDS and not issue Form 16?
No. The employer is responsible for deducting the TDS before giving the salary to the employee. The Income Tax rules state that every employer deducting TDS must present the employee with a Form 16.
Should you file for taxes if Form 16 was not issued to you?
Regardless of the status of Form 16, the responsibility of filing a return and paying taxes falls on the employee. Therefore, if the income falls above the minimum tax slab, the employee must file taxes and pay their dues. This is especially true if the employer fails to pay TDS to government authorities.
When is Form 16a issued?
Form 16a is given when TDS is taken out of all sources of income, like savings, investments, and insurance.
What does Form 16a contain?
It has the PAN, TAN, name, address, and TDS amount for both the deductor and the deductee.
When is Form 16a issued?
It is issued every quarter. Also, the form is required if the deductee has sources of income other than their salary.
How do I get Form 16a?
Unlike Form 16, Form 16a is issued by the deductor. The form will reflect the earnings and income tax deductions for the particular financial year. You can also download the form from the Income Tax Department website.
Required details while filling out Form 16a
- Name, address, TAN, and PAN details of the deductor
- Name, address, TAN, and PAN details of the deductee
- TDS and income details of the deductee
- The period of the form for that financial year
You must be wondering, how does Form 16a benefit employees? Despite what it seems like, there are many benefits to Form 16. Some of them are listed below:
- Ease in the filing of Income Tax Returns.
- Form 16 lists how the tax was calculated and shows any oddities.
- You can check all your tax-related information.
- Processing loans and visas becomes easy.
- You can check for any extra amount paid in taxes and avail refunds.
Form 16a is an important tool that will help you figure out your taxes and file your taxes like a good citizen.
If you need more guidance and assistance with understanding Form 16a, visit Piramal Finance. This online platform is what you need to learn everything about relevant developments in the world of finance. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!
Also Read: How are Form 16 and Form 16A different?