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What is Form 16

What is Form 16?

Form 16 is essentially a certificate employer issue their employees. It validates the fact that TDS has been deducted and deposited with the authorities on behalf of the employee.

Form 16 is a certificate issued by an employer and it contains the information you need to prepare and file your income tax return. Employers must issue it every year on or before 15 June of the next year, immediately after the financial year in which the tax is deducted.

What are the contents of Form 16?

It has two components – Part A and Part B. In case you lose your Form 16, you can request for a duplicate from your employer.

What is Part A of Form 16?

An employer can generate and download this part of Form 16 through the TRACES (https://www.tdscpc.gov.in/app/login.xhtml) portal. Prior to issuing the certificate, the employer should authenticate its contents. It is important to note that if you change your job in one financial year, every employer will issue a separate Part A of Form 16, for the period of employment.

Some of the components of Part A are:

  • Name and address of the employer
  • TAN & PAN of employer
  • PAN of the employee
  • Summary of tax deducted & deposited quarterly, which is certified by the employer

What is Part B of Form 16?

Part B of Form 16 is an annexure to Part A. If you change your job in one financial year, then it is for you to decide if you would want Part B of the Form from both the employers or from the last employer. Some of the components of Part B notified newly for the FY 2019-20 are:

  • Detailed breakup of salary
  • Detailed breakup of exempted allowances under section 10
  • Deductions allowed under the income tax act (under chapter VIA):
    • Deduction for life insurance premium paid, contribution to PPF etc., under section 80C
    • Deduction for contribution to pension funds under section 80CCC
    • Deduction for employee’s contribution to pension scheme under section 80CCD (1)
    • Deduction for taxpayer’s self-contribution to notified pension scheme under section 80CCD(1B)
    • Deduction for employer’s contribution to pension scheme under section 80CCD (2)
    • Deduction for health insurance premium paid under section 80D
    • Deduction for interest paid on loan taken for higher education under section 80E
    • Deduction for donations made under section 80G
    • Deduction for interest income on savings account under section 80TTA
  • Relief under section 89

What are the details required from Form 16 while filing your return?

With reference to the image below, here is where you will be able to locate certain information for filing your income tax return for FY 2018-19(AY 2019-20).

  • Allowances exempt under section 10
  • Breakup of deductions under Section 16
  • Taxable Salary
  • Income (or admissible loss) from house property reported by employee offered for TDS
  • Income under the head Other Sources offered for TDS
  • Breakup of Section 80C Deductions
  • Aggregate of Section 80C Deductions(Gross & Deductible Amount)
  • Tax Payable or Refund Due

Additional information, which you will require from your Form 16 while filing your annual return are:

  • TDS Deducted by Employer
  • TAN of Employer
  • PAN of Employer
  • Name and Address of Employer
  • Current Assessment Year
  • Your (Taxpayer’s) Name and Address
  • Your PAN

How to get Form 16?

You can get your Form 16 from your employer. Even if you have left your job, your employer will provide you the Form 16.

I don’t have Form 16 how do I file my return?

Though this is one of the most important income tax forms, don’t worry if you do not have it. You can still file your income tax return.

If there is no TDS is the employer required to issue a Form 16?

TDS certificate in Form 16 is issued when TDS has been deducted. In case no TDS has been deducted by the employer, he may not give you a Form 16.

When the employer deducts TDS and does not issue a certificate?

Any person responsible for paying salaries is required to deduct TDS before making payment. The Income Tax Act lays down that every person who deducts TDS from a payment, must furnish a certificate with details of TDS deducted & deposited. An employer in specific is compulsorily required to furnish a certificate, in the format of Form 16.

If no Form 16 has been issued to me does it mean I don’t have to pay tax or file a return?

  • While deducting tax on salaries and providing Form 16 is on the employer, the onus of paying income tax and filing income tax return is on you.
  • If your income from all sources is above the minimum tax slab you are required to pay tax, whether or not your employer deducted TDS.
  • Even when he fails to issue you a Form 16, you must file an income tax return and pay off the taxes that are due.