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Form 16

Income Tax Form 16

Last Updated 30th Jul 2021

  • Form 16 is mandatory to be issued by the employer for all those employees whose income exceeds ₹ 2.50 Lakh.
  • Form 16 is divided into two parts; Part A and Part B.
  • Part A of Form 16 contains personal details of the employee along with TAN, PAN of the employer, and details of TDS deduction.
  • Form 16A is a TDS certificate which includes details of TDS deducted for income other than salary.
  • Form 16B includes detailed information about the tax calculation after considering all the allowances and deductions.
INCOME TAX CALCULATOR

What is Form 16?

Every individual earning a monthly salary is entitled to receive Form 16 from his/ her employer. If you are a salaried individual, you would receive Form 16 from your employer before 31st May 2021. Form 16 is a certificate that certifies that TDS has been deducted from your salary by your employer and provides you with all the information required for filing your Income Tax return.

Different Parts of Form 16

Parts Description
Part A Details of TDS deducted on income
Part B Details of components of salary, tax due, tax paid

PART A of Form 16, 2021

Part A of Form 16 provides the amount and details of tax deducted from your income and deposited to the government as per monthly and quarterly TDS filed by your employer. It includes:

  • Your personal details such as name, address and PAN number
  • Details of your employer such as name of the firm, TAN number and PAN of your employer
  • Amount of TDS deducted and deposited quarterly along with other details including date of deposit, BSR code of the bank branch through which tax is deposited, challan serial number relating to each amount of tax deposited by your employer
  • Assessment year
  • Your period of employment with the current employer

How to Download Form 16 Part A

Employers can generate and download Part A of Form 16 by following the below-mentioned procedure.

Form 16A
  • Firstly, visit the portal of TRACES by clicking on https://www.tdscpc.gov.in/app/login.xhtml.
  • Now, log in the portal using your login ID and password.
  • Under the downloads tab, you can find Form 16 A.
  • Finally, fill the required details. It contains the following information.
    • Name and Address of the Employer.
    • Name and Address of the Employee.
    • PAN and TAN of the deductor/employer.
    • PAN of Employee.
    • Amount paid/credited.
    • Tax deducted at source.

PART B of Form No. 16, 2021

Part B is an annexure to Form 16 which includes details and components of salary paid, tax due and tax paid. It is a detailed computation and a systematic record of your taxable salary after allowed deductions and exemptions. Form 16 Part B includes the following information:

  • Gross Salary as broken in components such as basic salary, Dearness Allowance, HRA, Medical allowances, provident fund contribution by both employer and employee, leave travel concession, professional tax (if any), transport allowance, and others
  • Exempted allowances under section 10 of income tax act such as conveyance allowance, house rent allowance, children allowance, medical allowance etc.
  • Deductions allowed under chapter VI A of Income Tax Act
  • Relief under section 89 of Income Tax Act
  • Amount of tax due or paid on income
  • The form will also showcase the amount of tax refund if excess tax has been paid.

Why is Form 16 needed?

  • Form 16 is a detailed record of your salary and tax paid by your employer. You require Form 16 at the time of filing income tax return.
  • Form 16 is also accepted as an income proof in various transactions such as loan processing.
  • Form 16 can also be used to verify whether correct taxes have been deposited with the government account by comparing the same with your Form 26AS.

Form 16 Eligibility

As per the regulations by the Indian government, each salaried individual who is within the taxable income bracket is eligible for Form 16. Thus, if your total gross income exceeds ₹ 2.50 Lakh, then your employer is under an obligation to issue Form 16.

Employees or individuals whose income is less than ₹ 2.50 Lakh are exempted from income tax; thus, no tax is deducted; hence no Form 16 is issued. However, in today’s time, employers have started to issue Form 16 irrespective of the income as it is a consolidated proof of employee’s earnings and can be used as necessary documents in various areas.

What happens if Form 16 is not available?

In case you have not received Form 16 from your employer, you can refer to your Form 26AS available online. Form 26AS contains the details about the tax deducted from your salary and deposited with the government. However, you should also request and ensure that your employer issues Form 16 to you.

Form 16 precautions while filing income tax return

  • All pages of Form 16 Part A must be signed by the employer either digitally or manually.
  • Form 16 is generated by Income Tax department, when an employer fills the details of employee such as his gross salary, deductions and allowances as per the information furnished by employee. Employer issues Form 16 to the employees once in an assessment year.
  • If you have worked for more than one employer then you are required to collect Form 16 from each of your employers as the same would be required at the time of filling your Income Tax return.

What is Form 16A and Form 16B?

Form 16 is an important document when you are filing the income tax return. it’s two crucial components are Form 16A and Form 16B. Let’s dive deeper into each of these forms.

Form 16A

Form 16A is a certificate capturing details of TDS deducted on income other than salary. TDS on salaries is deducted at an average income tax slab as estimated based on the income of the employee, while TDS on income from other sources such as interest income, rent, etc. is deducted at the rate specified by the government. Form 16A is issued by deductor within the 15 days after the quarter ends. For example- for December quarter 2016, Form 16A will be issued before 15th January, 2017.

Form 16A is issued by the deductor that could be your bank or your employer or any other deductor. Form 16 A is issued by the bank when TDS is deducted from your income in respect of interest on FD, insurance commission, rent receipts or any other income earned. TDS deduced on other payments are also reflected in Form 16A.

Components of Form 16A

  • Name and address of the deductor
  • TAN and PAN number of the deductor
  • Name and address of deductee
  • PAN of deductee
  • Nature of payment, amount paid and date of payment
  • Receipt number of TDS payment
  • Challan details of TDS deposited

Form 16B

Form 16B includes the detail information of the calculation of tax after taking into consideration the investments declared by you at the start of year and the proof of other investments made during the financial year.

Form 16B also includes detailed information about all those allowances that may be necessary for the purpose of calculating your tax along with other details like medical bills, house rent, donations as furnished by you to the employer.

Components of Form 16B

Part B of Form 16 is an Annexure to Part A and includes the following information.

  • Break up of Salary.
  • Any other Income declared by the employee.
  • All deductions under Chapter VI-A.
  • Relief under Section 89.
  • Tax deducted at source.
  • Net Income tax which is payable/refundable.
Form 16B

Difference Between Form 16 , Form 16A and Form 16B

Form 16, 16A, and 16B are all certificates of tax deducted at source. The major difference between the three is ther person issuing these certificates.

Form 16: It is issued by the employer and includes information about the tax deducted by them on the income from salary after taking into account the allowances and investments declared by you along with its proof.

Form 16A: It is issued by the financial institutions, entities and people who have deducted tax at source on account of your income arising other than salary. For instance, income earned from interest on savings or fixed deposit, income from rent, etc.

Form 16B: It is issued to account for tax deducted at source on the income earned from the sale of immovable property. As per Income Tax Act, it is mandatory for the buyer of immovable property to deduct TDS of 1% on the sale value and submit to Income Tax Department . Form 16B serves as a proof that the buyer has deposited the tax .

Benefits of Form 16

Form 16 is a proof that the employer has deposited the tax deducted at source and has not committed any fraud. In addition it also has various other benefits like it is considered as a ‘income from salary’ statement. Besides Form 16 is demanded by various government authorities and companies on demand, for example:

  • Visa issuance.
  • At the time of changing jobs, it becomes a base for the next employer to calculate your tax liabilities.
  • It is an income proof.
  • A document to check for any overpaid taxes.
  • It helps in filing income tax return.
  • Single document to check all your tax-saving investments.
  • For loan assessment and approval.

How to get Form 16?

Form 16 is issued by the employer to the employee as a proof of tax deducted at source. It is mandatory for the employer to issue Form 16 for the TDS deducted on salaries.

Employers can either issue a print copy of Form 16 to its employees, or in soft copy to be downloaded from the employer’s account on TRACES website. Some employers also guide their employees to any outsourced online platform for payroll. You can always ask for a duplicate copy of Form 16 in case you have misplaced the original one.

To get the previous year’s Form 16 you can either ask your employer or check on the employer’s outsourced payroll platform.

To get Form 16A, you need to ask the financial institution issue you the form. You can also download it from your account in case its available. For TDS on income from rent, you need to ask your tenant to issue you the Form 16A, while you need to ask your employer if you have worked as a commission agent.

To get Form 16B, you need to ask the buyer of your immovable property to issue you the form.

Filing Income Tax Returns with Form 16

Form 16 is an important document in the process of filing IT return. Any individual whose income is ₹ 5 Lakh per year is mandatory to file return online. You can file your return by yourself or take the help of a Chartered Accountant or any third party service provider.

After filing your return online, you need to e-verify it by generating e-verification code using:

  • Aadhaar card OTP
  • Demat Account
  • Net banking
  • By generating EVC

Required Details of Form 16 while Filing Income Tax Return

To file your Income Tax Return, you would be required to fill the following details:

  • Allowances exempt under section 10
  • Breakup of deductions under Section 16
  • Taxable Salary
  • Income (or admissible loss) from house property reported by employee offered for TDS
  • Income under the head Other Sources offered for TDS
  • Breakup of Section 80C Deductions
  • Aggregate of Section 80C Deductions
  • Tax Payable or Refund Due
  • TDS Deducted by Employer
  • TAN of Employer
  • PAN of Employer
  • Name and Address of Employer
  • Current Assessment Year
  • Taxpayer’s Name and Address
  • PAN

What is Form 12B?

Form 12B is required to be furnished in case you join a new organization in the middle of the year. The form furnishes the details of your income earned from the previous employer. You are required to submit Form 12B to your new employer. Form 12B is filled with details from your salary slip and Form 16 issued by your previous employer.

  • Details such as TAN and PAN of your previous employer
  • Breakup of your salary
  • Deductions allowed as per chapter VI of income tax rules
  • Exemptions on allowances
  • TDS on salary deducted by your previous employer
  • Professional tax paid by employee if any

Presenting Form 12B to new employer is not mandatory as per Income Tax Act, but is advisable as non disclosure of your income till date to your present employer may result in lower TDS deduction which may lead to a penalty for nonpayment of advance tax.

What is Form 12BA?

Perquisites are additional benefits that are provided to you by your employer in addition to your salary. Your employer will give you Form 12BA which is a detailed statement of all perquisites, fringe benefits or amenities that are provided to you in lieu of your salary. You will receive Form12BA even when you receive no perquisites from your employer. In this case, the form will mention that you received no perquisites from your employer and hence, the value of perquisites is nil.

Form 12BA provides the value of the perquisites and their taxable amount. Income Tax Act has laid down rules for calculation of the value of perquisites. Perquisites are also mentioned in the Part B of your Form 16 along with TDS deducted. Hence, Form No. 12BA is an additional form provided by your employer that only covers details of perquisites.


Some of the perquisites are:

  • Medical facility
  • Credit card
  • Furnished or non furnished house without rent
  • Education facility for children
  • Interest free loan
  • Car facility

Contents of Form 12BA

  • Name and address of employer
  • TAN number
  • TDS Assessment range of the employer
  • Name and designation of employee
  • PAN of employee
  • Income under the head of salary other than perquisites
  • Value of perquisites

FAQs

How do I get Form 16?

You can get Form 16 either from your employer or through the online payroll service provider.

Can we download Form 16?

Form 16 is not available for download from the TRACES account of an employee. Thus, it can only be downloaded by the employer.

Is Form 16 mandatory for all employees?

It is mandatory for employers to issue Form 16 to all those employees whose annual income exceeds ₹ 2.50 Lakh.

What is Form 16 Part A and B?

Form 16 is divided into two halves, Part A and Part B. The Part A of Form 16 includes details of employee and employer:

  • Period of Employment
  • Name and Address
  • PAN and TAN
  • TDS deducted and deposited with the government.

On the other hand, Part B of Form 16 includes:

  • Income from other sources
  • Details of salary paid
  • Deductions
  • Tax Payable

What is the difference between Form 16 and 16a?

Form 16 is the certificate of TDS deducted from salary. It is sub-categorized into Part A, which includes employer and employee details, and Part B, which includes other details like deductions, details of salary paid, tax payable, etc.
On the other hand, Form 16a is the certificate of TDS deducted on income other than salary like interest from fixed deposit, TDS on rent, etc.

Is Form 16a mandatory for ITR?

Yes, Form 16, 16A, and 16B are mandatory for filing ITR.


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