Form 16 - Form 16 for Income Tax Filing With Example

Form 16 is an Income Tax form used by companies to provide their salaried individuals in India. This form carries all the required details that help the employee in filing their tax returns with the Income Tax department in India. The Income Tax Act of 1961 and the Income Tax rules of 1962 are the laws that are prevailing in India. When a Form 16 is provided to an employee by their employer it’s a source of proof of filing their Income Tax Returns, the form has various components such as Salary Income components of the employee. Every employer should provide their employees with the Form 16 who fall under the tax brackets set up the Finance Ministry of the Government of India. If an employee doesn’t fall under the tax brackets set, then he/she doesn’t receive the Form 16 as he/she will not need to pay taxes neither will they need to have Tax Deducted at source or TDS.

Form16 Components:

• Employee Personal details like name, Permanent Account Number (PAN) etc.
• Employer details, name, PAN, Tax deduction and collection Account Number (TAN), etc.
• An acknowledgement number of the taxes paid by the employer.
• Details of the salary; Gross salary, net salary, deductions, perks etc.
• Total income and tax deductions.
• Education cess and surcharge details.
• Taxes deducted as per sections 191A.
• Declaration of tax payments from the employer.
• Refunds in any to the employee, or balance of taxes payable by the employee.
• Receipt of the TDS paid.
• All details of the Tax Payment, like Challan number, cheque number, Demand Draft number etc.

How to download Form 16 online?

The Form 16 is a form which is provided by the employer. Your employer will be liable to provide the form even after you have left the organisation. However, if you have not received your Form 16, you can also consider downloading the form from the official Income Tax India government website.

It should, however, be kept in mind that the Form 16 provided by the employer will have all your details readily furnished in it. The Form 16 that you download from the government portal will just be a blank format and you will be required to fill up the form manually.

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.

Purpose of Form 16:

The Form 16 is used for two main purposes. They are discussed below:

1. Filing of Income Tax Returns (ITR): The Form 16 is the form which contains all the details related to the income and tax deductions of an individual. Thus, the Form 16 becomes an integral part of the Income Tax Return (ITR) filing process.

1. Source of verification: The Form 16 can be used to verify the tax amounts which have been deducted as TDS and the actual amount which has been remitted to the Government.

Demystifying Form 16 for the Common Man

Form 16 Parts(Part A and Part B):

The Part A of the Form 16 contains the TAN of the employer and PAN of the employer and the employee. The addresses of both the employee and employer. This will contains all details of the pay-outs from the employer and employee during the current financial assessment year. This part of the Form 16 also contains the TDS filed by the employer, the taxes deducted from your income and paid to the government every quarter. This also contains a monthly statement of the same.

The Part A of the Form must include:

• TDS deducted by the employer.
• PAN of the employer.
• Current financial assessment year.
• Employee PAN Number.
• TAN of the employer.
• The employee/tax payer's name, address etc.
• Name and address of the employer.

The Part B of the Form 16 contains the consolidated details of the salaries paid to the employee during the financial assessment year. The salary must be broken down, with details of deductions made by the employee under section 80C. The deductions that can be made under this section is EPF, NSC, Life insurance premiums, PPF, etc. If in one financial assessment year employee has changed jobs then the employee needs to be provided Form 16 of both companies.

The Part B of the Form must include:

• Taxable salary of the employee.
• TDS by the employer.
• Breakup of the deductions of sections 80C.
• Aggregate of the section 80C with gross and deductible amount.
• Tax refund or any payables due.

How to Fill the Form 16?

Filling out of the Form 16 as shown below:

The Part A of the form will be be as below:

• Name and address of the Employer: Will be the employer details.
• Name and designation of the Employee: Will be the employee details as per company records.
• PAN of the deductor: Permanent Account Number of the Employer.
• TAN of the deductor: Tax deduction and collection Account Number of the Employer.
• PAN of the employee: employee’s Permanent Account Number.
• CIT (TDS): This is the Income Tax Commissioner’s office details.
• Assessment year and period: Is the current financial year and financial year beginning 1st April and ending 31st March.
• Summary of the quarters mentioned the company.

The Part B of the form will be as below:

Under this section:

• Gross salary will be your salary without any deductions plus any prerequisites that you receive.
• Allowance that the company pays you, like travel allowance, house rent allowance etc.
• The total income chargeable under salaries.
• Gross total income will be the amount on which your taxes will be calculated.

Eligibility Criteria for Form 16:

Every individual who draws a salary is eligible to get the Form 16 from their respective employers. If TDS is deducted from an individual’s salary by the employer, the latter is liable to provide the Form 16 for the same.

What to do if you have Multiple Form 16?

An individual might have changed his/her job within one financial year. In such cases, he/she will have more than one Form 16. One from the previous employer and one from the present employer.

There are a number of third-party websites which can be used while filing of Income Tax Returns (ITR). Almost all these websites offer the option of uploading the separate Form 16s for the purpose of filing. Some information needs to be furnished while using these websites. This includes the income from salary, the address of the employers with pin code, investments (if any), and so on.

Form 16 vs. Form 16A

The Form 16 and Form 16A are both issued by an employer. Both the forms act as proofs of the tax deducted at source (TDS). The main differences between the Form 16 and Form 16A can be summed up as follows: