What is Form 16 ? How to Download Form 16, 16A, 16B Online?
What is Form 16 ? How to Download Form 16, 16A, 16B Online?
Form 16 is a critical income tax document issued by employers to their employees under Section 203 of the Income Tax Act.
Also known as a Salary Certificate, this form outlines the complete salary details of an employee along with the tax deductions in the specified financial year.
With the help of Form 16, you can understand your tax obligations and file your ITR in a timely manner.
In this post, we will discuss all the important things you need to know about Form 16 download procedure, its features, benefits, and more.
What is Form 16?
As per the Income Tax Act of 1961, every employer deducts the TDS (Tax Deduction at the Source) at the time of paying salary every month during a financial year.
Form 16, or the TDS Form 16, is an official document that outlines the salary paid to you along with the TDS amount that has been deducted from your income as per your salary slab.
It acts as a certificate of your income and signifies that the TDS amount deducted from your income is submitted to the Income Tax Department of India.
Note that, the TDS form 16 is only provided by the employer or a company to the employee.
What are the Components of Form 16?
Form 16 is divided into two important parts: Part A and Part B.
Let's discuss both parts in detail.
Part A of TDS Form 16
The first part of Form 16 contains all the information related to the salary and TDS deductions during each quarter of the year. In other words, part A of Form 16 represents the salary information and tax deductions of an employee in an orderly manner.
Below are the complete details outlined in Form 16, part A:
Name and address of the employer
Name and address of the employee
PAN number of the employer
PAN number of the employee
Tax Deduction Account Number (TAN) of the employer
Assessment year
Period of employment
Details of net income:
Gross Salary
Net Salary
Tax Deductions
Perks/Incentives
TDS Summary:
TDS amount
Date of deposit with the IT department
Date of TDS deduction
CIN (Challan Identification Number)
Part B of TDS Form 16
It is the second part of Form 16, which comprises details such as your salary breakdown, tax dues, tax paid, additional income, and so on. All these details about the employee are filled in by the employer.
Gross salary components of the employee:
Basic salary
Transport allowance (if any)
House rent allowance ( if any)
Other perquisites, etc.
Tax deductions from the salary:
Section 80C/80 CCC/80 CCD
Section 80D
Section 80G
Net taxable salary under Chapter IV-A
Rebate under Section 87 (if applicable)
Tax relief under section 89 (if applicable)
The total amount of payable tax on a given income
Education cess, etc.
Types of TDS Form 16
Form 16 is primarily used by the salaried employees. Those who generate an income other than salary receive two other types of forms, as mentioned below:
Form 16A
It is a TDS form that is used for tax deductions on income other than salary. For example, you will be provided with Form 16A when your bank deducts TDS on your interests gained on financial instruments like Fixed Deposits, insurance commissions, rent receipts, and so on.
Form 16B
Form 16B is a TDS certificate that outlines the tax deductions on the sale of a legal property. It is issued by the buyer to the seller at the time of making the property-related transaction.
A buyer must deduct the TDS (1% for the residential property) from the total amount he needs to pay the seller. Later, he must submit the deductions to the IT department and issue Form 16B to the seller of the property.
In essence, Form 16B is the official certificate that proves that the TDS deducted on an immovable property has been submitted to the government.
Important Terminology Used in TDS Form 16
| TDS (Tax Deducted at Source) | It is the income tax amount deducted from an employee's salary by the employer every month. |
|---|---|
| PAN (Permanent Account Number) | It is the unique 10-digit code issued by the IT Department of India for tax identification of individuals. |
| TAN (Tax Deduction and Collection Account Number) | It is a unique 10-digit code assigned to the individuals or entities responsible for deducting or collecting TDS. |
| FY (Financial Year) | It is the year during which an income is earned. It usually ranges from April 1st to March 31st. |
| AY (Assessment Year) | It is the year during which income is assessed for income tax purposes. It is usually the year after the financial year. |
| Perquisites | Refers to the non-monetary benefits and perks given by an employer to an employee. These may include medical facilities, transportation, food, etc. |
| Gross Salary | Total salary of an employee before any deductions. It includes the basic salary, allowances, and all the other salary components. |
| Education Cess | Refers to the additional charges applied for education and other similar purposes. |
| Verification and Certification | It is a section where the employer declares the accuracy of information provided in Form 16. |
| CIN (Challan Identification Number) | It is the unique challan number used by the employer to deposit TDS with the Income Tax Department. |
What is the Eligibility Criteria for Form 16?
| Requirements | Details |
|---|---|
| Salaried Employee | "Form 16 is only available for salaried individuals who receive a fixed salary from their employer and falls under a taxable income tax slab as follows: New Tax Regime: Those earning over ₹3 lakhs per year. Old Tax Regime: Those earning over ₹2.5 lakhs per year | "
| Exclusions | "Form 16 is not applicable to the following individuals: Self-employed professionals such as freelancers, business owners, etc. Those who have income other than salary. | "
| TDS (Deduction Source) | TDS must be deducted from the salary of the employee. |
| PAN (for employee) | Permanent Account Number (PAN) of the employee is required for tax identification. |
| TAN (for employer) | Tax Deduction and Collection (TAN) is required by the employer and is issued by the Income Tax Department of India. |
Difference Between Form 16 Vs Form 16A Vs Form 16B
| S.No. | Form 16 | Form 16A | Form 16B |
|---|---|---|---|
| 1 | It is issued by the employer. | It is issued by the financial institution or body that deducts the TDS. | It is issued by the buyer of a property to a seller for deducting TDS on the property. |
| 2 | TDS is deducted from the salary of an employee. | TDS is deducted from income other than salary. | TDS is deducted on the sale of a property. |
| 3 | It is issued on a yearly basis. | It is issued every quarter. | It is issued for each property-related transaction. |
| 4 | Only available for salaried people. | Only available for individuals who earn from multiple sources such as dividends, interests, commissions, etc. | It is available for incomes earned by selling an immovable property other than agricultural land. |
| 5 | It applies to individuals who fall under the taxable income slabs as per their selected tax regimes. | It applies to individuals earning above the specified limit. | It applied for property transactions exceeding ₹50 lakhs. |
How to Download Form 16 for Salaried Employees Online?
As an Employee
As mentioned earlier, only an employer can download Form 16. If you are an employee, you can access this form by requesting your employer.
If you have resigned or switched a job, then you can also reach out to your previous employer or HR department to request the TDS form 16.
As an Employer
There are two ways to download Form 16 online: via the E-filing Income Tax Portal or the TRACES website.
Via E-filing Portal
Step 1: Navigate to the official Income Tax Department e-filing portal.
Step 2: Move to the "Forms/Downloads" tab.
Step 3: Select "Income Tax Forms".
Step 4: Select "Form 16" from the "Frequently Used Forms" tab.
Step 5: Select your financial year.
Step 6: Select your preferred format.
Step 7: Click the "Download" button.
Via TRACES (Tax Deduction and Collection Account Number System)Website
Step 1: Browse the TRACES website.
Step 2: Select "Login".
Step 3: Fill in your PAN/TAN details and password.
Step 4: Select "Downloads".
Step 5: Select "Form-16" from the given options.
Step 6: Select the required financial year.
Step 7: Tap on the "Download" button.
What are the Benefits of Form 16?
Official Proof of Income: Form 16 is an official document that acts as proof of income for various reasons, such as applying for visas, loans, etc.
Helps in Claiming Refunds: In case your deducted TDS is higher than the applicable limit, then you can use Form 16 to claim your tax refunds. It basically acts as proof in the process of claiming refunds.
Avoid Double Taxation: Form 16 also helps in avoiding double taxation in the case of multiple employers. It specifies that the tax is already deducted by the previous employer.
Facilitates Income Tax Filing: By providing a detailed breakdown of salary, Form 16 also facilitates the filing of income tax.
Encourages Transparency: Form 16 also encourages transparency in salary distribution. It allows the employees to verify their TDS amount and whether or not it is deposited to the IT Department of the country.
Proof of Tax Compliance: Finally, Form 16 acts as proof of tax compliance. It is a valuable document that signifies that you have paid all the taxes applicable to your salary slab.
Important Points to Check When Receiving Income Tax Return Form
Personal Details: The first thing you must check after receiving TDS Form 16 is your personal information, such as your name, address, PAN, contact number, etc.
Employer's Details: Next, you need to make sure that your employer's details are correct and updated. In case of any discrepancies, contact your employer as soon as possible.
Salary Details: Next, carefully check your salary components such as your HRA, travel allowance, perquisites, and other perks. Ensure that all the details mentioned align with your employment contract.
TDS Amount: Pay attention to the TDS amount that has been deducted from your salary. You can also cross-check the TDS amount with your salary slips.
Tax Computations: Finally, check whether or not the tax is calculated as per your applicable tax slab and choice of income tax regime.
On finding any error or incorrect information on Form 16, you can reach out to your employer or the HR department of your organisation and ask for the rectifications.
Your employer will revise the details and issue an updated form 16.
Does Not Receiving Form 16 Mean No Tax Return?
The responsibility of deducting TDS from the salaries of employees and issuing Form 16 is of the employer. According to Section 272A(2)(g), failure to do so will result in a penalty of ₹100 per day.
If your employer refuses to provide you with Form 16, then there are chances that the TDS deducted from your salary has not been deposited to the government treasury. In this case, it is strongly recommended to reach out to the respective IT Assessing officer and urge them to take necessary action against the employer.
It is important to understand that the responsibility of filing ITR and paying taxes lies on the individuals. It means that even if you have not received Form 16 from your company or employer due to any reason, you will not be exempted from filing income tax returns unless your salary is below the specified taxable income slab.
In the absence of Form 16, you can utilise other documents such as salary slips, Form 26AS, proof of tax saving investment, TDS certificates from banks, and so on.
Conclusion
Form 16 is an official document provided by the employers to their employees. It is a critical document that ensures income tax compliance by both parties.
It provides accurate information about the salary of an employee along with the TDS deducted on the same.
This information helps in filing ITR smoothly and also ensures smart financial management. Moreover, Form 16 also acts as proof that the employer has deposited the deducted TDS to the government, promoting a healthy and transparent employee-employer relationship.
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