Form 16 is a TDS certificate that shows the salary earned and the TDS deducted from your salary. It is issued by the employer before June 15th every year, after the end of the financial year in which the income was earned. Keep in mind that you should receive Form 16 from all the employers you have worked with.
Form 16 plays a very important role when it comes to filing income tax returns for salaried individuals. It has two components: Part A and Part B.
Part A of Form 16
Part A of Form 16 provides details of TDS deducted and deposited quarterly details of PAN and TAN of the employer and other information.
An employer can generate and download this part of Form 16 through the TRACES (https://www.tdscpc.gov.in/app/login.xhtml) portal. The employer should authenticate the certificate’s contents before issuing it.
It is important to note that if you change your job in one financial year, each 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 and PAN of employer
- PAN of the employee
- Quarterly summary of total salary payments for the concerned financial year
- Summary of tax deducted and deposited quarterly, which is certified by the employer
Part B of Form 16
Part B of Form 16 is an Annexure to Part A. Part B is to be prepared by the employer for its employees and contains details of the breakup of salary and deductions approved under Chapter VI-A.
If you change your job in one financial year, you should take Form 16 from both employers. Some of the components of Part B notified newly are:
- Detailed breakup of salary
- Detailed breakup of exempted allowances under Section 10
- Deductions allowed under the Income Tax Act (under chapter VIA):
The list of deductions mentioned is as below:- 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 a pension scheme under Section 80CCD(1)
- Deduction for taxpayer’s self-contribution to a notified pension scheme under Section 80CCD(1B)
- Deduction for employer’s contribution to a 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.
- Tax calculated, surcharge, education and heath cess charged, relief under section 89.
Difference Between Form 16, Form 16A and Form 16B
Form 16 – Form 16 is a TDS certificate issued by the employer as proof of tax deducted from the employee’s salary income. It serves as proof that tax has been deducted at source from the employee’s salary income and deposited with the government. It is essential for filing income tax returns.
Form 16A – Form 16A is a TDS certificate issued not by the employer but by financial institutions on your income other than your salary. For example, a Form 16A shall be issued to you – when a bank deducts TDS on your interest income from fixed deposits, for TDS deducted on insurance commission, for TDS deducted on your rent receipts.
Form 16B – Form 16B is issued for TDS deducted on payments made for the purchase of property under section 194-IA of the Income Tax Act, 1961. The buyer of the property is responsible for deducting TDS at the rate of 1% before making payment to the seller. Subsequently, the buyer needs to furnish Form 16B to the seller as proof of TDS deduction.
When will Form 16 be Available for FY 2023-24?
The due date to issue Form 16 is 15th June 2024. If your employer deducted TDS from April ‘23 – March ’24, then Form 16 must be issued by 15th June ’24. If you lose your Form 16, you can request a duplicate from your employer.
What are the Eligibility Criteria for Form 16?
According to the regulations issued by the Finance Ministry of the Indian Government, every salaried individual whose income falls under the taxable bracket is eligible for Form 16.
If an employee’s income does not fall within the tax brackets set, they will not need to have Tax Deducted at Source (TDS). Hence, in these cases, the company is not obligated to provide Form 16 to the employee.
However, nowadays, many organisations issue this certificate to employees as a good work practice. It contains a consolidated picture of the individual’s earnings and has other additional uses.
Why is Form 16 Required?
Form 16 is a very important document as:
- Proof that the government has received the tax deducted by your employer.
- Assists in the process of filing your income tax return with the Income Tax Department.
- Proof of Salary Income
- Many banks and financial institutions demand Form 16 to verify the person’s credentials while applying for loans.
Each salaried employee can obtain Form 16 from the employer on or before June 15th. If any employer delays or fails to issue Form 16 by the specified date, the employer is liable to pay a penalty of Rs.100 per day until the default continues.
What are the Differences between Form 16 and 16A?
In the following table, we have provided the differences between Form 16 and Form 16a based on several criteria,
| Form 16 vs Form 16A | ||
| Criteria | Form 16 | Form 16A |
| Type of Income | TDS on salary income | TDS on income other than salary (e.g., interest, rent, professional fees) |
| Issuer | Issued by the employer | Issued by entities or individuals who deduct TDS on non-salary payments |
| Details Included | Part A: Employer and employee details, TDS summary, TDS payment acknowledgement.Part B: Detailed salary breakup, deductions, taxable salary, tax computation, TDS details | Deductor and deductee detailsNature of paymentAmount paid/creditedTDS details (receipt number, date of payment/credit, amount deducted, rate of TDS) |
| Periodicity | Issued annually at the end of the financial year | Issued quarterly |
| Relevance for Filing ITR | Used by salaried individuals for income tax return filing | Used for filing returns for income from non-salary sources |
| Nature of Deductor | Employer-employee relationship | Any deductor-deductee relationship (e.g., bank-customer, client-professional) |
| Verification | Contains employer’s declaration and signature verifying accuracy | Contains deductor’s declaration and signature verifying accuracy |
| TDS Return Form Reference | Not typically referenced in TDS return forms | Referenced in TDS return forms like Form 24Q, and 26Q for quarterly TDS reporting |
| TDS Payment Acknowledgment | Includes acknowledgement of TDS payment made by the employer | Includes acknowledgement of TDS payment made by the deductor |
This table concisely summed up the Form 16 and Form 16A differences.
How to Download Form 16?
TRACES (TDS Reconciliation Analysis and Correction Enabling System) is an online website by the Income Tax Department of India. It is used to manage TDS-related activities and provides services to employers, taxpayers, and other stakeholders. This platform allows employers to download Form 16 Part A & B. To download Form 16 from TRACES, follow these steps:
Step 1: Visit the official TRACES website.
Step 2: If you are already registered, enter your PAN card number (User ID) and Password to log in. For new users, complete the registration process and create a new account.
Step 3: Navigate to the ‘Downloads’ tab and select ‘Form 16.’
Step 4: Choose the Form type and select the financial year for which Form 16 is required.
Step 5: Verify PAN and other details.
Step 6: Enter the TDS receipt number and select the date of the TDS.
Step 7: Add the total tax deducted and collected.
Step 8: Click on submit to request for download.
Step 9: Download the files under the ‘Downloads’ tab once the Form is available for download.
Form 16 Details when Filing Your Return
With reference to the image below, here is where you can locate certain information for filing your income tax return for FY 2023-24 (AY 2024-25).
- Allowances exempt under Section 10
- Break up of deductions under Section 16
- Taxable salary
- Income (or admissible loss) from house property reported by an employee and offered for TDS
- Income under the head ‘Other Sources’ offered for TDS
- Break up of Section 80C deductions
- The aggregate of Section 80C deductions (gross and deductible amount)
- Tax payable or refund due
You can also find additional information of your employer in your Form 16 while filing your annual return, such as:
- TDS deducted by the employer
- TAN of employer
- PAN of employer
- Name and address of employer
- Current assessment year
- Your PAN
Points to be Noted while Checking Form 16
- Once an individual receives Form 16 from the employer, it is their responsibility to ensure that all the details are correct.
- One should verify the details mentioned in Form 16, for example, details of the amount of income, TDS deducted, etc.
- If any of the details is mentioned incorrectly, one should immediately reach out to the organisation’s HR/Payroll/Finance department and get the same corrected.
- The employer would then correct their end by filing a revised TDS return to credit the TDS amount against the correct PAN. Once the revised TDS return is processed, the employer will issue an updated Form 16 to their employee.
Upload Form 16 & File Income Tax Return
Our software automatically extracts all the relevant information from your Form 16 and prepares your tax return. You do not need to enter anything manually.
What is the Password of Form 16 and How to Open It?
Form 16 password is configured by your employer. You can refer to the email sent by your employer to check the format of the password.
Form 16 password is usually configured in the below combination.
- Your PAN (Lower or uppercase).
- Your Date of birth in DDMMYYYY format or DD/MM/YYY format.
- Combination of your PAN (Lowercase or uppercase) and Date of birth.
Form 16 Password Example
Let’s say your PAN is AAAAA0000A and your date of birth is February 9, 1990, then, your password will be AAAAA09021990.
How to Remove the Form 16 Password?
Since Form 16 is password protected, you need to enter a password each time you open it, to avoid that, you can follow these steps-
- Right-click on the PDF file and open the file with Google Chrome.
- Enter the password in the above-specified format and click on the submit button.
- The screen printer option will appear in the upper right corner; click on it or press Ctrl + P.
- Now, the print window will appear with an option to change the destination
- Change the destination to Save as PDF.
- Click on the Save button below and choose the desired location to save the PDF
- The password is now removed from Form 16.
How to validate the digital signature on your Form 16?
Step 1: Check the validity of the digital signature. In a case, the validation fails, the ‘Signature Validation Status’ will display that the validity is unknown. You will see the below information:
Step 2: You should perform further validations by clicking on ‘Signature Properties’, and then click on ‘Show Signer’s Certificate’. When you click on ‘Show Signer’s Certificate’, a certificate viewer window appears. In the ‘Summary’ tab, you can see the details of the digital signature. Further, in the ‘Details’ tab, you can view the details of the signer such as name and email address of the signer. You can also see the digital signature certifying authority. CCA India is the official certifying body for digital signatures in India.
Step 3: The CCA is not part of the list of digital certificates. You can add CCA India to your trusted list of digital certificates. You click on the tab ‘Trust’, and click on ‘Add to Trusted Certificates’. A security message will pop-up. Click ‘OK’, and next, it will open ‘Import Contact Settings’. Select ‘Use this certificate as a trusted root’. Please note that when you add the certificate to your trusted list, you should make sure that the ‘Certified Documents’ option is selected. Click on ‘OK’ and return to the ‘Certificate Viewer’ window. Now CCA India is part of your trusted certificates.
Step 4: Hence, you can re-validate the digital signature by returning to the ‘Signature Properties’ window. You can re-validate by clicking on the ‘Verify Certificate’ or ‘Validate Signature’ button. The digital signature is now valid. Click on ‘Close’ and your Form 16 validation is complete.
When does the employer deduct TDS and does not issue a certificate?
Any person responsible for paying a salary must 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 TDS deducted & deposited details. 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 the onus of deducting tax on salaries and providing Form 16 is on the employer, the onus of paying income tax and filing an income tax return is on you. If your aggregate income from all sources goes above the minimum tax slab, you must pay tax, whether or not your employer has deducted TDS. Even when he fails to issue you a Form 16, you must file an income tax return and pay off the due taxes.
Can you use TRACES to get Form 16 from your employers?
Employees cannot use TRACES to get Form 16. They do not have information of the TDS receipt number and the total tax deducted. They have to get it from their employers directly.
How employer can download Form 16 from TRACES?
Employer can download Form 16 from the TRACES website, the steps to follow is given above.
How can I open my Form 16?
You can use your Form 16 password to open this password-protected PDF. The password is the first five characters of your PAN followed by your date of birth in the format DDMMYYYY.
What is the penalty for not furnishing Form 16 by the employer?
The employer will have to pay a sum of Rs. 500 per day for every day the default continues.
What is the difference between Form 16 and Form 16A?
While Form 16 is a TDS certificate for only salary income, Form 16A is applicable for TDS on ‘Income Other than Salary’.
For example, a Form 16A shall be issued to you – when a bank deducts TDS on your interest income from fixed deposits, for TDS deducted on insurance commission, for TDS deducted on your rent receipts. In fact, when TDS is deducted from any other income you receive, that is liable for such deduction.
Is Form 16 and Income Tax Return the same?
No, Form 16 is not the same as an Income Tax Return (ITR). Form 16 is a TDS certificate issued by the employer, whereas an ITR is a form filed by the taxpayer with the income tax department declaring their income and taxes.
What should i do if there is error in my Form 16?
If you notice any discrepancies or errors in Form 16, you should bring it to the attention of your employer immediately for correction.
How long does it take to get Form 16?
The employer deducting tax should issue Form 16 by 15th June after the end of the financial year in which tax is deducted.
How to check the authenticity of my Form 16?
Your Form 16 is digitally signed by or on behalf of your employer. In addition to checking the details of your salary, tax deductions, tax calculations you should also check the form to make sure that the digital signature is validated and the form is authentic. The validation of a digital signature ensures that there is no tampering with the Form 16 after signing.
Is it mandatory to issue Form 16?
Yes, it is mandatory for every employer who has deducted any tax at source to issue Form 16 to the employees. It is a vital document for the employees to file their income tax returns.
