Why indispensable Form 16? Form 16 is basically a certificate issue to their employees. This gives
validity that the TDS on behalf of the employee has been deducted and submitted to the government
authority. It gives a detailed summary of the salary and TDS deducted from the employee.
What is Form 16? - Basics
Form 16 available for all of the
salary information you need to file your tax return. Employers must issue the
tax immediately after June 15 of each year or immediately after the fiscal year
in which it is deducted.
The New modified Form 16 divided
into two separate parts Part A and Section B
Part A of Form 16
The portion of Form 16 Part A provides quarterly TDS deducted and submitted details, panel details, and other information including the employer's TAN.
An employer can create and download
this part of Form 16 through the Tracks (https://www.tdscpc.gov.in/app/login.xhtml)
portal. Before issuing the certificate, the employer has to prove its content.
It is important to note that if you change your job in a financial year, each employer will issue a separate part of Form 16 for the duration of the job.
Some elements of Part A:
Name and address of the employer
TAN and employer pan
Employee Pan
Tax summary deductions and
quarterly deposits, which are certified by the employer.
Part B of Form 16
Part B of Form 16 is an addition
to Part A, the employer of Section B must prepare for his employees and must
have details of salary-break, exemption approved under Chapter VI-A.
If you change your job in one
financial year, you should get a Form 16 from both employers. Here are some of
the ones that re-notified Part B:
Detailed pay break
Detailed break of allowance
exempted under section 10
Permission to exempt under Income
Tax Act (under VIA in Chapter):
The following is a list of
discounts:
Exemption of life insurance premium
paid under section 80C, contribution to PPF etc.
Exemption for contribution to
pension fund under section 80CC
Exemption for the contribution of
the employee in pension scheme under section 80CCD (1)
Exemption for taxpayer
self-contribution in a notified pension scheme under section 80CCD (1B)
Exemption for Employer's
Contribution to Pension Scheme under Section 80CCD (2)
Exemption for health insurance
premiums paid under Section 80D
Exemption for interest paid on
loans are taken for higher education under section 80E
Discount for donations under Section 80G
Discount for interest income on
savings accounts under Section 80TTA
Released under section 89 (1)
Details from Form 16 are required
when filing your return
With reference to the figure below,
you will be able to find specific information for filing income tax returns for
the financial year 2021-22 here (AY 2022-23)
The allowance will be waived under
section 10
Separation of exemption under
section 16
Taxable salary
Income (or perceived loss) from the
home property reported by employee proposed for TDS
Separation of Section 80C exemption
Section 80C Discount Sum (Total and
Discount Amount)
Refunds due to tax payable or
unpaid
Form 16- B
The additional form you will need
when submitting your annual return from your Form 16 is:
TDS cut by the employer
Employer's TAN
Employer's Pan
Name and address of the employer
Current assessment year
Your (taxpayer's) name and address
Your pan
What are the eligibility criteria
for Form 16?
As per the rules issued by the
Ministry of Finance, Government of India, every salaried person under a taxable
bond is eligible for Form 16.
If an employee does not fall within
the prescribed tax brackets, he or she does not have to deduct Source (TDS) tax.
Therefore, in this case, the company is not subject to the obligation to
provide Form 16 to the employee.
However, nowadays, as a good work practice, many organizations issue this certificate to the employee even in this case because it has a consolidated image of a person's earnings and has other additional uses.
