Income Tax - Form 16

What is Form 16? Describing Form 16A & Form 16B

Form 16 is a TDS(Tax Deducted at Source) Certificate issued by your employer. It contains a detailed record of income earned as salary, exemptions declared and taxes paid on it. It is a proof that your employer has deducted TDS on your salary and deposited it to the Income Tax Department.

It consists of 2 parts – Part A & Part B

Use of Form 16

  1. It is the most important document for a salaried person to file Income Tax Returns
  2. You can match the TDS Deducted on Form 16 and Form 26AS
  3. It can be very helpful for a speedy visa approval
  4. In a Loan Application, generally it is not required but it can give the bank an assessment of your financial health and employment.

Getting Form 16

It is issued by your employer(s). Last date for your employer to issue your Form 16 is 15th June.

Understanding Form 16 Part A

Part A consists of the payments made to you by your employer and TDS deductions. You are issued the form by your employer only when they deposit the said amount of taxes on your behalf to the Income Tax Department. Following are the details in Part A –

  1. Employer – Name, Address, TAN & PAN
  2. Employee – Name, Address & PAN
  3. Assessment Year, Employment Period & Amount paid each quarter by the employer & subsequently the TDS.

Note – Each employer has to issue a different Form 16(A), if you have had more than 1 job in a Financial Year.

Understanding Form 16 Part B

Financial Year 2019-20 on wards there have been a few changes in the Part B, making it more detailed and better. Part B is sort of a supporting document to Part A, justifying the tax deductions.

  1. Detailed description of your Salary and other income sources
  2. Section 10 allowances breakup
  3. Deductions such as in 80C, 80D etc – as allowed under chapter VIA
  4. Relief under Section 89
  5. Section 16 Deductions – It contains standard deduction of ₹40,000 & entertainment expenses
  6. Net Tax Payable

Points to Note

  1. It cannot be downloaded, it is issued by your employer
  2. Return can be filed even if you do not have your Form 16
  3. It is compulsory for your employer to furnish Form 16 if he has deducted TDS
  4. Onus of paying income tax and filing income tax return is on you and not your employer.

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