Form 16 - Form 16 for Income Tax Filing With Example

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.
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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:

Form - 16 - Part A
Form 16-Part A
  • 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:

Form - 16 - Part B
Form 16-Part B-I Page

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.
Form - 16 - Part B - Page 2
Form 16-Part B-II Page

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:

Form 16 Form 16A
It records the tax deducted at source (TDS) from the income which comes under the ‘income from salaries’ head. It records the tax deducted at source (TDS) from any income which does not come under the ‘income from salaries’ head.
It is applicable to any individual who earns a regular income under the ‘income from salaries’ head. It is applicable to any individual who receives an income which is chargeable under the Income Tax Act.
It is applicable for income from salary only. It is applicable for income from any source other than salary, such as rent for plant and machinery, rent for building, commission, professional tax, and so on.

News About Form 16

  • 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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