Form 16 is an income tax form used by firms to give their employees information on the tax deducted. Form 16 is considered as the proof filing of income tax returns by your employer to the government. For example, if your income is more than the tax exemption limit, then the employer is required to deduct TDS on your salary and submit it to the government. If your salary income is less than the tax exemption limit, then in that case the employer will not deduct any TDS. When the employer provides the Form 16, it means that your employer has filed your income tax returns. The form can also be considered as your salary TDS certificate.
Simply, the Form 16 certifies how much an employee has earned during a financial year and how much has been deducted as TDS. The form has two parts — Part A and Part B.
The part A consists of PAN, TAN details, name, address, TDS deducted and other details of the employee and employer.
The part B consists of details such as other incomes, deductions, tax payable, salary paid, etc. The form is generally issued by the employer every year on or before 15th June.
What are the components of Form 16?
• Refunds or balance of taxes payable
• TAN, PAN details of the employer
• Details of tax payment
• Personal details of the employee
• Taxes deducted according to section 191A
• Salary details
• TDS receipt
Part A of Form 16
Part A is issued by the employer.
• PAN and TAN of employer
• PAN details of employee
• Employer name and address
• Tax deducted and deposited quarterly
Part B of Form 16
• Part B is an annexure to Part A
• Relief under section 89
• Detailed breakup of salary
• Deductions allowed under I-T Act