Form 16 is a crucial document provided by employers to employees at the end of each financial year. It contains details required for filing income tax returns and acts as proof of TDS deposited with the Income Tax department. The document includes information about salary, tax-saving instruments, and allows for correction of errors. It can be used as income proof and is necessary for filing ITR. It is issued by the employer by 31 May of the assessment year, and is essential for those earning a salary and filing tax returns. The form consists of two parts: Part A, with employer details and quarterly tax deductions, and Part B, which includes a detailed salary breakup, allowances, and relief provided under the Income Tax Act. Different types of Form 16 exist, including Form 16A and Form 16B, each applicable to specific income sources and transactions. Form 16 is vital for banks and financial institutions when individuals seek loans. The article also explains the process of downloading Form 16 online, details the difference between Form 16, Form 16A, and Form 16B, and provides information on filing ITR with Form 16, and how to proceed if Form 16 is lost. Additionally, it outlines the details required for filing income tax returns and provides steps for filing ITR online with Form 16. If an individual doesn’t receive Form 16, alternative documents can be used to file tax returns. The summary also includes a procedure for calculating salary income if Form 16 is not received and lists the details receivers must check in Form 16, emphasizing the importance of accurate information and the correct PAN number.
Employers typically base their tax calculations on the employee’s forecasted earnings and investment declarations made at the start of the year or throughout it.
Form 16 serves as proof of the TDS that the employer or organisation has deposited with the Income Tax department.
What is Form 16?
Form 16 is a document that contains all details required to file the income tax returns. The employers will need to provide Form 16 to employees at the end of every financial year.
- According to the Income Tax Act, every employer is required to deduct TDS when paying salaries. This is calculated based on the income tax slab rates in effect for that financial year.
Form 16 – When is it Issued?
Form 16 must be given by the employer by 31 May of the assessment year. This gives the employee sufficient time to file the ITR before the last date.
Benefits of Form 16
The main benefits of Form 16 are mentioned below:
- Refunds can be claimed (if applicable).
- All tax-saving instruments can be viewed.
- In the case of any errors, information can be corrected.
- Salary details are provided.
- Form 16 can be submitted as income proof.
- ITR can be filed with the help of Form 16.
How to Download Form 16 Online?
The procedure to download Form 16 PDF for salaried employees from the official Income Tax Department website is mentioned below:
Step 1: Visit the official website of the Income Tax Department
Step 2: On the Right End, Click on ‘Menu‘ and Select ‘Forms/Downloads‘ section.
Step 3: Now, you will find the ‘Income Tax Forms‘ option under Forms/Downloads section.
Step 4: Scroll down the page you will see Form 16 Under Income Tax Forms.
Step 4: Next, you will find the ‘PDF‘ and ‘Fillable Form‘ options available under ‘Form 16‘.
Step 5: Click on the relevant option. You will be able to download the form on the next page.
Types of Form 16
The two types of Form-16 are:
Form 16-A
- Form 16A is a TDS certificate used for TDS on income besides salary.
- When your bank deducts TDS from your interest income from fixed deposits, TDS on insurance commissions, TDS from rent payments, or any other income that is subject to such deduction, for instance, you get a Form 16A.
- Information about the income earned, the TDS deducted from it, and the TDS deposited is provided in Form 16A.
- Additionally, it includes the deductor’s/deductee’s name, address, PAN information, challan information for TDS deposits, and the deductor’s TAN information.
Form 16-B
- The TDS certificate for TDS deducted during the sale of immovable property is Form 16B.
- It serves as proof that the TDS deducted on selling property has been submitted to the government.
- When purchasing immovable property, the buyer must deduct 1% TDS on property from the price they must pay to the seller.
- Following that, the buyer has to submit Form 16B to the property seller and file TDS with the Income Tax Department.
Difference Between Form 16, Form 16A, and Form 16B
The difference between Form 16, Form 16A, and Form 16B has been summarised in the following table:
| Form 16 | Form 16A | Form 16B |
| Issued by the employer who deducts the TDS. | Issued by the financial institution who deducts the TDS. | Issued by the respective buyer to the seller for the deduction of TDS for sale of immovable property. |
| Issued for tax deducted at source on salary. | Issued for tax deducted at source for any other income except for salary. | Issued for tax deducted at source for the sale of immovable property. |
| Applicable only to salaried income | Applicable to income earned as interest, commission, dividends, etc. | Applicable to income earned by selling land or building (other than agricultural land) |
| Issued annually | Issued quarterly | Issued according to the number of transactions |
| Employees earning Rs.2.5 lakh and above | Individual having an income beyond a certain threshold | On transactions exceeding Rs.50 lakh |
Different Parts of Form 16
The two different Parts of Form 16 are mentioned below:
- Part A of Form 16
- Part B of Form 16
Part A of Form 16
Before the certificate can be provided, authentication must be provided by the employer. In case you move to a new job, the new employer must provide a Form 16 as well. Each new employer must provide Form 16. The main components of Part A are mentioned below:
- Employer’s name and address
- Employer’s PAN and TAN
- Employee’s PAN
- Details of the tax deducted and deposited on a quarterly basis
Part B of Form 16
An annexure to the first part of Form 16, Part B has the below-mentioned components:
- Salary breakup (detailed)
- Breakup of the allowances under Section 10 of the Income Tax Act in detail
- Deductions allowed under Chapter VI A of the Income Tax Act
- Any relief under Section 89 of the Income Tax Act
Form 16 Eligibility
- Any individual who is earning a salary and must file tax returns are eligible for Form 16.
- In case individuals need not file tax returns, it is not mandatory for them to submit Form 16.
- However, employers issue the certificate so that a track of their earnings can be maintained.
Why Form 16 is Needed?
Form 16 can be a crucial document for the following reasons:
- It works as a proof that your employer has deducted tax from your salary and deposited it with the government
- It helps in the income tax returns efiling process
- It is usually requested by banks and financial institutions when you approach them for loans.
Demystifying Form 16 for the Common Man
Watch the video and get complete information about Form 16 and its working process:
How to File ITR with Form 16
There are certain bits of information that are required when filing your ITR. These details can be found on Form 16. They include the following:
- Allowances that are exempt under Section 10 of the Income Tax Act
- A breakup of the deductions under Section 16 of the Income Tax Act
- Income from house property provided for TDS
- Income from other sources provided for TDS
- Taxable salary
- A breakup of the deductions under Chapter VI-A of the Income Tax Act covering the deductions under Section 80C, Section 80CCC, Section 80CCD(1), Section 80CCD(1B), Section 80CCD(2), Section 80D and Section 80E 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 Income Tax Act
- Refund due or net tax payable
Additional details from Form 16 required for filing your income 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
*There are certain fields in the form that are notified for deductions. They are as follows: :
| Deductions | Contribution |
| Section 80C | PPF, Premium Payments Towards Life Insurance |
| Section 80CCC | PF |
| Section 80CCD(1) | Both salaried and self-employed towards NPS |
| Section 80CCD(1B) | Additional Deduction towards the Pension Scheme |
| Section 80CCD(2) | Employer’s Contribution to Pension Scheme |
| Section 80D | Health insurance |
| Section 80E | Education Loan |
| Section 80G | Donations or Charitable Trusts |
| Section 80TTA | Savings Account |
Steps to file ITR Online with Form 16
Step 1: Visit the official Income Tax e-Filing portal.
Step 2: To log in to the portal, enter your user ID and password.
Step 3: Enter your PAN card number as well as other requested information.
Step 4: Provide other important details like your date of birth, address mobile number, etc.
Step 5: Upon entering all the details, you can submit the income tax return for verification.
Can I File ITR Without Form 16
- According to Section 272A(2)(g) of the I-T Act, it is the employer’s responsibility to deduct tax from employees’ salaries and provide a certificate of TDS.
- Failure to do so will result in a fine of Rs.100 per day of default.
- If an organisation or employer refuses to issue the certificate despite repeated requests, there could be a chance that the deductor has not deposited the tax with the relevant government department.
- After the employee informs the concerned Assessing Officer, they will take the appropriate corrective action and start the penalty proceedings against the employer.
- However, it is the responsibility of the individual to pay income taxes and file returns.
- Employees are not exempt from filing tax returns if their employer did not issue Form 16.
- Income tax returns can be filed by using alternative documents like Form 26AS, rent receipts, TDS Certificates from the bank, proofs of tax-saving investments, and salary slips.
Lost your Form 16? Here’s what you can do
- Form 16 is a highly important document that must be preserved carefully.
- However, in case you have lost your Form 16, you can go through your mail and find it (if you received it via mail).
- In case you received a hard copy from your employer and lost it, you can request your employer to issue another form.
How to Calculate your Salary Income if you have not received Form 16?
- Sometimes, employers do not provide Form 16 to employees whose annual salary is lower than the minimum taxable limit (Rs.2.5 lakh).
- In case you wish to file your income tax returns without Form 16, you will have to refer to your bank statements, payslips, home loan or education loan certificates, tax-saving investment proofs, Form 26AS, etc.
- Your payslips will contain information regarding your basic salary as well as allowances, while Form 26AS will have the information regarding all the taxes you have paid and the taxes that have been deducted.
Given below is an example for how tax is calculated in case you do not receive the Form 16:
- Basic Pay: Rs.30,000 per month (Rs.3.60 lakh per year)
- Transport Allowance: Rs.1,400 per month (16,800 per year)
- Deductions: Rs.30,000 (Since, tax exemption of Rs.1,600 per month is allowed, no tax will need to be paid on the allowance.)
Taxable Amount: (Rs.3,60,000 – Rs.40,000) – Rs.2,50,000 = Rs.70,000
Details a Receiver Must Check in Form 16
- Once the employer issues Form 16, the receiver must make sure that all the information on it is accurate.
- Besides checking personal information and details regarding the TDS and income, the receiver must also check the PAN number.
- If the PAN is stated incorrectly, it must be rectified immediately by contacting the company’s HR, payroll, or finance department.
- The employer will provide the employee with a corrected and updated Form 16.