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

Form 16 Components

Form 16 is essentially a certificate that employers issue to their employees. It contains all the main points required to organize your tax returns and file them. Employers are expected to issue Form 16 to their employees p.a. by the 15th of June of the subsequent year. There are two segments 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 are often 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 a person changes jobs over the course of a fiscal year , the employer will only issue Part A of Form 16 for the amount of employment. You can have as many of those certificates as many roles you’ve got held during a fiscal year .

Here are the most important 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

What is Form 16
Form 16 Components

An annexure to the first as a part of Form 16, Part B has the subsequent components:

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

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

  • Deductions under Section 80C of the tax Act – contribution to PPF, premium payments towards life assurance , etc.
  • Deductions under Section 80CCC of the tax Act – contribution to PF
  • Deductions under Section 80 CCD(1) of the tax Act – employee’s contribution towards the pension scheme
  • Deductions under Section 80 CCD(1B) of the tax Act – self-contribution of the taxpayer towards the pension scheme
  • Deductions under Section 80 CCD(2) of the 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 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 so as to download the plan 16 from the tax (IT) website:

  • Step – 1:Visit the official tax portal at https://www.incometaxindia.gov.in.
  • Step – 2:Click on the ‘Forms/Downloads’ option from the highest menu on the page and click on on the ‘Income Tax Forms’ option.
  • Step – 3:You are redirected to new webpage with an inventory of tax forms.
  • Step – 4:From the list of forms, go to the row with ‘Form No.: 16’.
  • Step – 5:The form is out there in two formats – ‘PDF’ and ‘Fillable Form’. The ‘Fillable Form’ are 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 data 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 tax Act
  • Taxable salary
  • A breakup of the deductions under Section 16 of the 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 tax Act
  • Refund due or net tax payable

Additional details from Form 16 required for filing your 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 are often an important document for the subsequent reasons:

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

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

Form 16 may be a highly important document that has to be preserved carefully. However, just in case you have lost your Form 16, you’ll undergo your mail and find it (if you received it via mail). In case you received print copy from your employer and lost it, you’ll request your employer to issue another form.

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

Sometimes, employers don’t provide Form 16 to employees whose annual salary is less than the minimum taxable limit (Rs.2.5 lakh). In case you would like to file your tax returns without Form 16, you’ll have to ask your bank statements, payslips, home equity credit or education loan certificates, tax-saving investment proofs, Form 26AS, etc. Your payslips will contain instruction regarding your basic salary also as travelling allowances, while Form 26AS will have the information regarding all the income taxes you have paid and therefore the taxes that had 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 equity credit certificate through which he was eligible for a deduction of Rs.40,000 from his income. Mr. Prabhu’s income for the fiscal year would be as follows:

Rs.30,000 x 12 months (Basic salary per month x no. of months per year) = Rs.3,60,000

Rs.2,000 x 12 months (Transport allowance per month x no. of months) = Rs.24,000 (Nil)

Since travelling 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 essentially Rs.2.6 lakh – Rs.2.5 lakh = Rs.10,000.

Tools & Portals You Might Be Interested to AuTOMate Your Accounting

Most Preferred Excel to Tally Data Import Utility

Excel2Tally.in

Import any Software Data to Tally Using Our Simple Excel Templates

Visit Site
Most Preferred Data Import Utility for Online Sellers

eCom2Tally.in

Import any Online Portal Order-wise Sales, Returns & Settlement Data to Tally!

Visit Site
Most Preferred Job Portal for Accountants

Jobs4Tally.in

Fastest Growing Job Portal for Accounting Community!

Visit Site