The employer issues a document of TDS to its worker. The certificate states that the tax has been deducted by the employer, on behalf of the employee. This document is known as Form 16. Every worker needs to understand what Form16 means. They should include Form 16 in their income tax return. The form is given yearly. The employer should issue it before 15th June every year. Form 16 should be mandatorily issued to taxpayers.
Form 16 is divided into two parts – Part A and Part B. If a worker loses the form, their employer can issue a duplicate one.
Parts of Form 16
Form 16 is divided into two parts, Part A and B.
Part A of Form 16
This form contains the quarterly tax deduction details of salary, in each financial year.
The following are the contents of Form 16A:
- Employer name and address
- Employees name and address
- Employer’s TAN & PAN
- Employee’s PAN
- TDS made
Part B of Form 16
Part B of Form 16 has the details of the employee’s salary. It also includes the address and the name of the employee and employer.
Part B components are:
- Salary breakup
- Mention exempted allowances (Section 10)
- Income Tax deduction
- Relief as per Section 89
Where to Get Form 16 In Case of More than One Employer
If you have worked with more than one employer, then ask each employer to give you Form 16 for the tenure you spend in their office. If in case, the employer delays your Form 16 or refuses to issue you one, then a penalty of Rs. 100 per day will be levied on them. It will continue till they issue your Form 16.
Importance of Form16
After knowing about Form16 and its meaning, let’s see why it is important. It serves as proof that the government has received the tax. The employer deducts this from the employee’s source salary. The form helps in the process of filing for an ITR. Form 16 is required, when an employee applies for a loan. It helps in verifying the credentials.
Process of Filing Tax Return Through Form16
As you must know that employers provide Form 16. If you have left the organization then get in touch with your HR to get Form 16. It carries important information required to file tax returns. It is suggested to take the CA’s help to file your tax returns. You can also refer to online portals where you can upload your Form 16 and all the important details required to file your tax returns.
Eligibility of Form16
As per the Income Tax Act of 1961, employers should give Form 16 to employees getting salaries and taxable income. Any individual earning more than Rs. 2,50,000 annually should get Form 16. You can ask your employer to share the same with you.
Benefits of Form16
An employee can enjoy benefits with their Form16, such as:
- It is your salary proof and the proof of tax paid on your behalf
- While filing income tax it is needed to give the exact income account
- Form 16 also helps in visa processing
- Using Form 16 you can verify the correctness of the tax paid
- It helps in applying for loans because it is your income proof
How to Download Form16?
Form 16 can’t be downloaded online by an employee, the employer has to share it with them. Employers can download it by following these steps:
- Go to the tdscpc.gov.in/app/login.xhtml
- Use your employer ID and password to log in
- Now find the ‘Download’ button
- Search Form 16 A
- Add the employee’s PAN, address and name
- Then fill in your details
- Download the form and share it with the employees
Information Form16 Requires While Filing an IT Return
After receiving Form 16 from the employer, check that all the details are correct. Verify the following components:
- Correct personal information and PAN details
- The TDS deducted should be the same as the TDS mentioned
- Check the employer’s details and TAN and PAN details
- Verify Part B of Form 16 to ensure that all components and break-ups are correct
Form 16A: Is It the Same as Form 16?
Form 16A is issued on income other than salary. Whereas Form 16 is limited to salary income. Employees who have TDS cut from their bank’s interest on fixed deposits, insurance commission, or rental income, among other sources, will be issued Form16A. TDS is also deducted from other sources of income if they meet the criteria for the deduction.
Form 16 is issued by the employees. You can ask for Form 16A from the client or the bank, keeping the purpose in mind. The employee must know the Form 16 meaning and the amount of salary deducted to make the process easier.
Is Form 16 Required if the Income is not Taxable
Though it is not required to ask for Form 16 if your income is not taxable, you should still ask your employer to share it with you, as it is your proof of income and you may require it at any time.
Form 16 is introduced in favour of employees. It will let them know the benefit of tax deductions. Those who receive an income through a pension and is taxable, then they should ask their bank to give them Form 16. If by any chance you have lost your Form 16, you can get the duplicate one issued by your employer. The employee needs to know the importance and what Form 16 means.
Hope this article has helped you in understanding the meaning of Form 16 and other important details. To know more about other finance and tax-related aspects, do visit the official website of 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!