What is form 16 and its various parts?


Form 16 is a document which is issued by every employer to their employees. Under section 203 of income Act, 1961 this certificate is issued by your employers. This certificate gives the entire detail of tax deducted at source (TDS). This tax deduction at source(TDS) can be done at income chargeable which comes under the head of the salary. In the other simple words, it is a certificate which indicates that how much TDS is deducted from your salary. This TDS deduction is done by your employers. This form 16 is issued once in a year. Usually, it is issued on or before of 31 May.

What are the details present in Form 16?

This certificate contains all the information about the salaried class. That includes who much TDS is deducted from your employer on your salary and it also indicates that after the TDS deduction has done on your salary. The employer has deposited the deducted TDS with the income tax department. Form 16 is also called as salary TDS certificate. Very important point of this certificate is that this certificate is only applicable to salaried class people. If in any year you are the employee of more than one employer. In that case, both the employer has to issue separate Form 16 for you.

Why is it so important?

If you are planning to file the income tax return through online mode. This is now days are called e-filing. In that case, this certificate plays a very important role. This certificate can be used as a proof of personal accuracy. The reason behind this is that this certificate contains all the information about the salaried person which includes the various tax deductions done.

One can also use this certificate for the purpose of personal verification also. This can be done by matching the TDS details from this certificate with the TDS details at Form 26 AS. They must match exactly be matched.

From where and when it is issued?

This certificate is issued by your employer if you are a salaried person. This certificate is issued once in a year by your employer. Usually, it is issued by 31st Day of May of the financial year next following the financial year in which the income was paid and tax deducted.

What does it indicate if it is not issued?

If this certificate is not issued by your employer. In that case, it indicates that your employer has done the TDS deduction at your salary and has not deposited the deducted amount with income tax department. In that case first checks your deducted amount in Form 26 AS regarding the deducted amount. If still, no details are there on that form. In that case, you can SUE your employer.

Form 16 has two Part A and Part B:

Part A contains the following information:

  1. TAN details of employ and employer.TAN stands for the Tax deduction and collection amount.
  2. PAN details of employee and employer.PAN stands for a Permanent account number.
  3. Complete name and address of employee and employer.
  4. It gives the year in which employee has severed it services with the employer.
  5. It also mentions the assessment year. For the financial year 2014-15 the assessment year would be 2015-16.
  6. Plus give the TDS deduction details and the amount deposit to the I-T department. This is done by your employer.
  7. It is issued on a quarterly basis.
Part B contains the following information:
  1. It gives the complete breakup details of your paid salary.
  2. It gives the details of the deduction claimed under section 80 of Income Tax Act. Under Section 80 C you can claim from EPF, PPF, NSC, life insurance premium. Under section 80 D you can claim from Health insurance. Moreover, under section 80 G you can claim from the donation.
  3. If in any year you are having more than one job. In that case, this part will give you the details of both the jobs.
  4. It is prepared manually by your employer and is issued with part A.
  5. It also gives the information of your total taxable income. Plus how much tax deduction is done on that total taxable income.What is form 16 and its various parts?

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