What is Form 16?

What is Form 16?

If you are a salaried employee, and your company deducts tax from your salary, then Form 16 is one of the most important documents you will need when you file your tax returns.

What is Form 16?

Form 16 is a statement of the tax deducted at source (TDS) or taxes your company has deducted from your salary and deposited with the government on your behalf. When you file your income tax returns, Form 16 helps you calculate how much tax you have already paid and what is due to be paid. If you have paid more tax than you are liable to pay, you can claim a refund.

Form 16 is, therefore, important to ensure that you don’t overpay or underpay your taxes.

Form 16 has two parts – Part A and Part B.

What is income tax Form 16 Part A?

Part A contains the following details:

  • Employer’s TAN or Tax Deduction and Collection Account Number

  • Employer’s and Employee’s Permanent Account Number (PAN) details

  • Addresses of employee and employer

  • Assessment year

  • Period of employment

  • Summary of the amount of TDS deducted from your salary every quarter

  • Summary of the TDS deposited with the government

  • Certificate of monthly deductions

What is income tax Form 16 Part B?

Part B of your Form 16 is a consolidated summary of salaries you received and deductions you claimed. It consists of:

  • Salary break up

  • Details of deductions claimed under Chapter VIA of the Income Tax Act

  • Total taxable income

  • Tax deducted from your income

What if I have worked with more than one company?

If both companies have deducted TDS from your salary, you should get Form 16 from both.

What if my employer does not give me Form 16?

Under Section (203) of the Income Tax Act, if an employer deducts tax from an employee’s salary, it is compulsory for the former to issue Form 16.

The employer must issue Form 16 before June 15 for the financial year that ended on 31 March of the same year. Failing this, the employer must pay a penalty of Rs 100 for every day’s delay. Currently, the government has extended the deadline for filing income tax returns to 15 March 2022, according to a notification issued by the department of revenue of the finance ministry. The ITR deadline extension has come after taxpayers asked the tax department and finance ministry to extend the ITR filing dates due to the rising coronavirus cases and issues with the new income tax portal.

If you haven’t been issued one, file a written complaint with your Assessing Officer, who supervises your IT returns.

Keep copies of payslips that show tax deductions. You can use that to calculate your tax liability and file your returns.

You can check Form 26AS online, which is a record of all the taxes that have been deducted and deposited with the government on your behalf, to see if your employer has deposited the tax deducted. If your employer has deducted tax but not deposited it, check if you have provided the right PAN to the employer.

If the PAN is correct and your employer has not deposited it at all, then you may follow up with your employer to make the deposit. However, it is important to note that according to Section 205 of the Income Tax Act, 1961, once TDS is deducted from a particular income, the assessee cannot be called upon to pay further tax on the same. You may also complain to the jurisdictional officer.

Please do note that the Central Board of Direct Taxes has extended the time for linking PAN with Aadhaar till 31st March 2022. So do take advantage of this extension.

Investor can claim a deduction of a maximum of Rs. 1.5 lakh per annum by investing in a tax-saving FD. Know about your returns with FD Calculator.

Investor can claim a deduction of 1.5 lacs by investing in tax saving fixed deposit.

Read more on how to file your income tax online here.

*The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice before you take any/refrain from any action. All information is subject to the relevant Act, Rules, Regulations, Policy Statements, etc., of the Income Tax Department and subject to change. Viewers are advised to verify the content from original Government Acts/Rules/Notifications etc.