An employer issues Form 16 to all their salaried employees. This document proves TDS deduction from an employee’s salary by the employer. Further, the certificate shows that the employer has deposited the TDS with the government authorities on behalf of the employee. If you want to know more about how to file Form 16, then read along!
What is Form 16?
As mentioned, Form 16 validates TDS deduction and deposition to the IT Department from one’s salary. In case you have changed multiple employers in a year, or have worked with more than one employer at a time, you will have to obtain separate Form 16 from each of your employers.
However, TDS can only be subtracted by the employer if the employee’s salary is more than the tax exemption limit of Rs. 2.5 lakh. If your employer provides you with a TDS certificate, it shows that they have already deposited the TDS deducted on your behalf.
What are the Types of Form 16?
If you want to know how to file IT return Form 16, you will need to know about the different types of Form 16 first. The different types of Form 16 are:
Form 16A- Form 16A is required for all incomes earned except from salary such as from mutual funds, dividends, commission, interests, etc. However, a person or an institution that deducts the income tax on income other than salary issues Form 16A. Additionally, salaried employees do not require Form 16A.
Form 16B- Income through purchase or sales of immovable property requires issue of Form 16 B. It is required for any transactions that exceed Rs. 50 lakh.
What are the Different Parts of Form 16?
Form 16 is essentially divided into Part A, and Part B. Part A comprises TAN details, PAN, name, address, the amount of TDS deducted, and different other details of the employee and employer. On the other hand, Part B contains deductions, tax payable, and salary paid, etc. The components of both parts are explained below.
Part A of Form 16
Before knowing about the various components of Part A of Form 16, one must understand that the employer provides this part. It contains the following components:
- TAN and PAN details of the employer
- PAN details of employee
- Employer’s name and address
- Quarterly tax deduction and deposit
Part B of Form 16
The various components of Part B are:
Who is Eligible to File Form 16?
Newly employed individuals tend to be unsure whether they are eligible to file income tax returns with Form 16 or not.
Employers provide their employees with a Form 16 if their employees’ salary falls above the taxable limit. However, they are not obligated to provide this certificate to the employees who fall under the minimum taxable limit.
How to download Form 16?
One can download Form 16 from the Income Tax Department website and follow the process as mentioned below:
- Visit the official website of the Income Tax Department
- Under the ‘Forms/Download’ section, you will find the ‘Income Tax Forms’ option, click on it.
- On the next page, you will find the ‘PDF’ and ‘Fillable Form’ options available under ‘Form 16’.
- Click on the relevant option.
- You will be able to download the form on the next page.
How to File ITR with Form 16?
An income tax return is a form that allows a taxpayer to declare his or her expenses, income, investments, etc. After the implementation of the Income Tax Act in 1961, it has become mandatory for taxpayers to file ITR. However, filing income tax returns can be confusing for those doing it for the first time. Here is a step-by-step guide on how to file income tax returns online using Form 16:
Step 1: Visit the IT Department’s official portal.
Step 2: Register with your PAN, which will later become the user ID. However, registered users can log in by clicking on Login Here.
Step 3: Go to the e-file section and click on Income tax returns.
Step 4: Choose ITR form from the drop-down menu.
Step 5: Click on continue.
Step 6: Fill in details regarding income.
Step 7: Calculate the tax liabilities.
Step 8: Fill in bank details in the tax paid and verification tabs.
Step 9: Select Preview and click on Submit ITR
Step 10: Choose “I would like to e-verify”. Then the individual will receive ITR-V verification document in the email id.
Step 11: Enter the EVC/OTP generated from My Account within 60 seconds.
Step 12: Save the EVC and ITR for future reference.
What are the Benefits of Filing Form 16?
Form 16 is beneficial because of the following reasons:
- It validates that the employer has already deducted tax from an employee’s salary and deposited it with the government authorities.
- Moreover, this form comes in handy when filing for the income tax return process.
- Financial institutions and banks ask for Form 16 submission when an individual goes to apply for a loan.
What Are Some Points to Remember before Filling Form 16?
Some key points an individual should remember before they go to file Form 16 are:
- There should be no false information provided in Form 16.
- Rectify all errors immediately.
- Individuals should request their employers to provide Form 16 if not already done.
- Additionally, one can check the IT portal to see if the TDS has been deposited or not.
- Finally, the employee has to check the payment of taxes.
How to calculate your salary if Form 16 is not received from your employer?
For employees who have an annual salary which is lower than the taxable limit of Rs. 2.5 lakh, the employers do not provide Form 16. If you wish to file ITR in this case, you will have to refer to your bank statements, tax-saving investment proofs, Form 26AS, etc. Pay slips can also be provided where basic salary details have been mentioned.
One must file Form 16 to apply for income tax returns. Moreover, it is a vital document that validates their income and tax deductions. One can check the TRACES website if they did not receive any Form 16 even after TDS deduction from salary.
FAQs on Filing Form 16
Q1. Will the employer provide Form 16 if there is no tax deduction?
Form 16 is only provided when TDS has been deducted from the employee’s salary by the employer. Therefore, if the tax is not deducted, they might not receive Form 16 from the employer.
Q2. When is Form 16 issued?
Form 16 has to be issued every year by the employer either before or on June 15 of the following year, that is, after the year when tax was deducted.
Q3. How to file ITR without Form 16?
Here are the steps to file ITR without Form 16:
Step 1: Calculate total earnings from all income sources.
Step 2: Match the TDS amount deducted with the amount in the 26AS form.
Step 3: Calculate income tax liability.
Step 4: Pay additional tax if required.
Step 5: File ITR.
Q4. Will one have to pay income tax or file ITR if no Form 16 has been issued?
The employer has to deduct the taxes from the salaries and provide Form 16. However, every individual is responsible for seeing if they are in the eligible tax bracket and if they have to file for ITR.
Q5. What is the difference between Form 16 and Form 16 A?
Form 16 is issued to salaried individuals that have to pay a TDS on the salary amount. In contrast, Form 16A is a TDS certificate that is provided for TDS deduction on income other than salary.
Read More on Income Tax Act