Form 16 - Form 16 for Income Tax Filing With Example Last Updated : 21 Sep 2019

Form 16 is provided by employers to salaried individuals in the country. It contains all the information required by the employee at the time of filing his/her income tax returns with the I-T Department of India.

Form 16 Components

Form 16 is basically a certificate that employers issue to their employees. It contains all the details required to prepare your income tax returns and file them. Employers are expected to issue Form 16 to their employees every year by the 15th of June of the following year. There are two components in Form 16 – Part A and Part B.

Learn more on Income Tax, Income Tax Calculator, Income Tax Slabs and Income Tax Refund. in our articles

Part A of Form 16 can be generated and downloaded by employers from the TRACES portal (https://www.tdscpc.gov.in/app/login.xhtml). The contents of the certificate must be authenticated by the employer before issuing it to the employee. In case an individual changes jobs over the course of a financial year, the employer will only issue Part A of Form 16 for the period of employment. You can have as many of these certificates as many jobs you have held in a financial year.

Here are the Main components of Part A of Form 16:

  • Employer’s name and address
  • Employer’s PAN and TAN
  • Employee’s PAN
  • Details of the tax deducted and deposited on a quarterly basis

Form 16 – Part B and its components

An annexure to the first part of Form 16, Part B has the following components:

  • Salary breakup in detail
  • Breakup of exempted allowances under Section 10 of the Income Tax Act in detail
  • Deductions allowed under Chapter VI A of the Income Tax Act*
  • Relief under Section 89 of the Income Tax Act

*There are certain fields in the form that are notified for deductions. They are as follows:

  • Deductions under Section 80C of the Income Tax Act – contribution to PPF, premium payments towards life insurance, etc.
  • Deductions under Section 80CCC of the Income Tax Act – contribution to PF
  • Deductions under Section 80 CCD(1) of the Income Tax Act – employee’s contribution towards the pension scheme
  • Deductions under Section 80 CCD(1B) of the Income Tax Act – self-contribution of the taxpayer towards the pension scheme
  • Deductions under Section 80 CCD(2) of the Income Tax Act – employer’s contribution towards the pension scheme
  • Deductions under Section 80 D of the Income Tax Act – premium payments towards health insurance
  • Deductions under Section 80 E of the Income Tax Act – payment of interest on education loan
  • Deductions under Section 80 G of the Income Tax Act – donations or contributions towards charitable trusts
  • Deductions under Section80 TTA of the Income Tax Act – income from interest on savings account

Steps to Download Form 16 Online:

The steps mentioned below are required to be followed in order to download the Form 16 from the Income Tax (IT) website:

  • Step – 1:Visit the official Income Tax portal at https://www.incometaxindia.gov.in.
  • Step – 2:Click on the ‘Forms/Downloads’ option from the top menu on the page and click on the ‘Income Tax Forms’ option.
  • Step – 3:You will be redirected to new webpage with a list of Income Tax forms.
  • Step – 4:From the list of forms, go to the row with ‘Form No.: 16’.
  • Step – 5:The form is available in two formats – ‘PDF’ and ‘Fillable Form’. The ‘Fillable Form’ will be a ‘.tx’ format file.
  • Step – 6:Download the format which is best suited for you.

Demystifying Form 16 for the Common Man

Form 16 Details you will Require for Filing your Income Tax Returns

There are certain bits of information that are required when filing your ITR. These details can be found in Form 16. They include the following:

  • Allowances that are exempt under Section 10 of the Income Tax Act
  • Taxable salary
  • A breakup of the deductions under Section 16 of the Income Tax Act
  • Income from house property provided for TDS
  • Income from other sources provided for TDS
  • A breakup of the deductions under Chapter VI-A of the Income Tax Act covering the deductions under Section 80 C, Section 80 CCC, Section 80 CCD(1), Section 80 CCD(1B), Section 80 CCD(2), Section 80 D and Section 80 E of the Income Tax Act
  • Aggregate of deductible amount under Chapter VI-A of the Income Tax Act covering the deductions under Section 10(a), Section 10(b), Section 10(c), Section 10(d), Section 10(e), Section 10(f), Section 10(g), Section 10(h), Section 10(i), Section 10(j), and Section 10(l) of the Income Tax Act
  • Refund due or net tax payable

Additional details from Form 16 required for filing your income tax returns

  • Tax deducted at source by the employer
  • Employer’s TAN
  • Employer’s PAN
  • Employer’s name as well as address
  • Present assessment year
  • Name and address of the taxpayer
  • PAN of the taxpayer

Why you Require Form 16

Form 16 can be a crucial document for the following reasons:

  • It works as a proof that your employer has deducted tax from your salary and deposited it with the government
  • It helps in the income tax returns efiling process
  • It is usually requested by banks and financial institutions when you approach them for loans

Lost your Form 16? Here’s what you can do

Form 16 is a highly important document that must be preserved carefully. However, in case you have lost your Form 16, you can go through your mail and find it (if you received it via mail). In case you received a hard copy from your employer and lost it, you can request your employer to issue another form.

How to calculate your salary income if you have not received Form 16 from your employer

Sometimes, employers do not provide Form 16 to employees whose annual salary is lower than the minimum taxable limit (Rs.2.5 lakh). In case you wish to file your income tax returns without Form 16, you will have to refer to your bank statements, payslips, home loan or education loan certificates, tax-saving investment proofs, Form 26AS, etc. Your payslips will contain information regarding your basic salary as well as allowances, while Form 26AS will have the information regarding all the taxes you have paid and the taxes that have been deducted.

For instance, Mr. Prabhu who works with ABC Ltd. didn’t receive Form 16 from his employer. He computed his income for the year using his monthly payslips according to which his basic pay was Rs.25,000. His payslips also showed that he had a transport allowance of Rs.1,500 per month. Moreover, he had a home loan certificate through which he was eligible for a deduction of Rs.40,000 from his income. Mr. Prabhu’s income for the financial year would be as follows:

Rs.25,000 x 12 months (Basic salary per month x no. of months per year) = Rs.3 lakh

Rs.1,500 x 12 months (Transport allowance per month x no. of months) = Rs.18,000 (Nil)

Since transport allowance is subject to an exemption of Rs.1,600 per month, Mr. Prabhu will not be taxed on it.

The total taxable income of Mr. Prabhu is Rs.3 lakh minus Rs.40,000 (deduction), which is basically Rs.2.6 lakh – Rs.2.5 lakh = Rs.10,000.

News About Form 16

  • New format for Form 16 announced

    The Central Board of Direct Taxation (CBDT) has announced a new format for the TDS salary certificate, otherwise known as Form 16. There will be a comprehensive breakdown of the allowances paid to the employee which are exempt from taxes. It will also have a breakup of the tax breaks that are claimed by the employee. The earlier Form 16 allowed for consolidated figures for both the allowances and tax breaks. Even if breakups were given, it was allowed in different formats. Both this gave rise to ambiguity about the compositions individually. Changes have also been made in the TDS return format which is filed by companies regarding the details of the tax deducted at source from the salaries of employees. These changes will allow tax personnel to verify and cross-check the Form 16, income tax returns, and the TDS returns of the company accurately and easily. Discrepancies between these can be more easily noticed by tax officials as the cross-checking will possibly be digitised. The notification about the new Form 16 was issued by the CBDT on April 12, 2019. The new format will, however, come into effect before the last date for Form 16 or TDS certificate issuance. The date from which the new forms are to be used is May 12, 2019.

    17 April 2019

  • Date For Filing Income Tax Returns Extended To August 5

    The Income Tax Department has extended the deadline for filing Income Tax Returns from July 31, 2016 to August 5, 2016. This was done to make up for the strike by public sector banks.

    Taxpayers in Jammu and Kashmir, which is in a state of tumult, have up to August 31 to file their returns.

    The tax returns can be filed either online through the Income Tax E-filing portal, or through a tax expert or chartered accountant. For filing the returns, you need to have your Forms 16A and 16B, and the proofs of investment.

    3 August 2016

  • Time for you to get your TDS Certificates

    Taxpayers can start collecting their TDS Certificates because May 31 was the last date for tax deductors to finalise and issue them. If your employer has not provided you with Form 16 and 16A, they are liable to pay a penalty.

    The penalty can be up to Rs. 100 per day per certificate, but cannot exceed the tax amount deducted. While employers have to send Form 16s to their employees by May 31 (for the previous financial year), other TDS deductors such as banks have to issue Form 16A every quarter, by July 30, October 30, January 30 and May 30.

    So ideally you should have all your TDS certificates by now, but most employers finish the task of distribution of the Form 16s during the first week of June.

    3 June 2016

  • Income Tax Department To Clamp Down On Fake Bills

    The Income Tax Department announced on Tuesday that changes would be made with regards to the reporting format for those individuals looking to avail of tax deductions on leave travel allowance (LTA), leave travel concessions (LTC), house rent allowance (HRA) and interest paid on home loans. The IT Department is looking to implement the changes with a view to clamping down on claims made by taxpayers with fake rent receipts or leave travel expenses. CEO and Co-founder of BigDecisions.com, Manish Shah, stated that additional details will be asked during the tax exemption claim procedure in an effort to plug leakages under tax provisions. Previously HRA exemption would be ascertained by the employer and included in the Form 16 of the employee as long as the rent receipts were provided in time.

    9 May 2016

  • Not all Donation will be eligible for Tax Deductions

    An individual who has made donations towards political parties, charitable institutions, etc, can file a claim for a tax deductions while filing their IT returns before 31st August 2016. Salaried employees if have not had this calculated in their Form 16 then, it can be while filing returns. This deduction can be claimed under Section 80G along with a receipt. The rate of deduction allowed is 50% and if the donation is made with a social purpose or a importance of the country then a 100% deduction will be permitted. Such as National Defence Fund, the Prime Minister’s National Relief Fund, the National Children’s Fund and the National Foundation for Communal Harmony Fund.

    2 March 2016

  • By Due Date is Form 16 not issued Employer can be given a Penalty

    Form 16 is essential while filing a tax return, if you’re a salaried employee. If an employer doesn’t cut the TDS for an employee, then he isn’t required to provide the employee with the Form 16. But if there is a TDS deduction, the employer should issue the forms by 31st May of that year. For each day delayed in issuing the forms the employer is liable to pay a penalty fee of Rs. 100 until the form is issued.

    18 February 2016

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