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Form 16 document is one of the most important tax documents for both salaried employees and the employers. In this guide we have covered each and every aspect related to Form 16. This guide is divided into two sections-
Form 16 is a certificate issued to salaried individuals from their employer when he deducts tax
from the employee salary. In simple words, it is an acknowledgement that states your income from
that particular employer which has been accrued during last Financial year and Tax deducted upon
it (if any).
Form 16 is an important document that is issued in accordance with the provisions of the Income
Tax Act,1961. Form 16 contains details of the amount of tax deducted at source (TDS) on salary by
your employer along with the salary breakup for the financial year. In a nutshell, it could be
said that Form 16 is a certificate of proof of the TDS deducted & deposited by your employer.
Form 16 is a very important document as it:
Income Tax Law mandates the employer who holds TAN no and deducts tax on the salary of an employee to issue Form 16. So, If your tax is not being deducted then your employer can refuse to issue Form 16 to you.
It must be issued by 15th June of the year for which it is being issued. For example, for the F.Y. 2021-22. the due date for the issue of Form 16 was 15th June 2022. If any employer delays or fails to issue Form 16 by the specified date, then he is liable to pay a penalty of Rs.100 per day till the date the default continues.
Understanding & learning how to fill form 16 is very simple. It is divided into two sections- Part A and Part B.
This part of income tax form 16 covers employer, employee, TDS payment details. It shows quarter-wise details of your tax deposited with the government. Some of the details are:
This part shows the detailed computation of Income, on the basis of which tax is being calculated and deducted by your employer. It contains the breakup of the salary earned by you, various deductions, exemptions (if any) and the tax computation after considering all the items on the basis of applicable tax slab rates. The details mentioned in Part B are as follows:
- Wheather opting for Taxation under section 115BAC: Yes or No
(for better understanding of 115BAC, please refer to our guide on 115BAC or click here)
A. Gross Salary(1): This part of Form 16 requires details of salary as per provisions of section 17(1), perquisites and any profits received in lieu of salary u/s 17(2)&17(3) respectively.
B. Exemptions and allowances considered(2): Earlier in this part of form, combined information of all the exemptions under Section 10 was required, but with the introduction of new Form 16, a list of allowances is provided, and the details are required to be filled. The list of allowances are as follows:
(Note:- Breakup of this will be prepared by employer and will be provided to employee before
furnishing part B of form 16, it may includes the following:-
-Remuneration received as an official, by whatever name called, of an embassy, high commission
etc under section 10(6)
- Allowances or perquisites paid or allowed as such outside India by the government to a
citizen of India for rendering service outside India under section 10(7).
- Compensation limit notified by CG in official gazette as per 1st proviso of section
10(10B)
- Compensation under schemes approved by CG as per proviso of section 10(10B)
- Amount received/ receivable on VRS or termination of service under section 10(10C)
- Tax paid by the employer on Non Monetary perquisites under section 10(10CC)
- Prescribed Allowances or benefits (not in nature of perquisites) specifically granted to
meet expenses wholly, necessarily and exclusively and to the extent actually incurred, in
performance of duties of office or employment under section 10(14)(i)
- Prescribed Allowances or benefits (not in nature of perquisites) specifically granted to
meet personal expenses in the performance of duties of office or employment or to compensate
him for the increased cost of living under section 10(14)(ii).
C. Total Amount of Salary received from Employer (3): This part of the form calculates the total salary received including allowances and other perquisites.
D. Deductions under Section 16 (4): Budget 2018 announced the standard deduction in lieu of transport and medical allowances received by the employee which can maximum amounts to Rs. 40,000 and then increased to 50,000 p.a. In the new form 16(a) separate column for standard deduction is introduced. All the deduction columns are mentioned below:
E. Total amount of deduction under section 16(5)
F. Income Chargeable under the head Income from Salaries (6): This column shows the net income form salary after deduction of all the allowances and deductions. This includes Income from House Property and Income from Other Sources
G. Any other income declared by the employee as per section 192BB (7): This column of the form enables the employee to declare any other income with the proof of the income.
H. Total amount of other income reported by the employee (8): This column provides a total of all income earned by an employee other than salary.
I. Gross Total Income (9): This column of the form indicates the total income of employees reduced by the exemptions but before deduction under Chapter VI-A.
J. Deduction under Chapter VI-A (10): Earlier, there was no separate list of deductions, an option was there to disclose the section under which deduction has been claimed. But in Form 16, disclosure of deductions is required as per a separate list.
K. Aggregate of deductible amount under Chapter VI-A (11): This column totals the amount of deduction from all the sections under Chapter VI- A as claimed by the employee.
L. Total taxable Income (12): This column refers to the net income of the employee after considering deduction under Chapter VI-A.This is the amount on which tax is calculated.
M. Tax on Total Income (13): This column specifies the Tax amount as per the applicable tax slabs in column 12.
N. Rebate under section 87A, if applicable (14): This Column specifies the tax rebate, If the total income of a person doesn’t exceed Rs. 5,00,000/- then a tax rebate of 100% will be available to the person under this column subject to a maximum amount of Rs. 12,500/-.
O. Surcharge, wherever applicable (15): This column refers to the additional tax in form of a surcharge which is applicable if income exceeds a certain benchmark limit (currently 50lac, 100lac, 200lac & 500lac).
P. Health and Education Cess (16): This column is introduced in the new Form 16.
Q. Tax payable (17): This column is calculated as 13+15+16-14.
R. Relief under section 89 (18): This column refers to any relief which is allowed against the arrear of salary received in the Previous year.
S. Net tax payable (19)
Every salaried employee whose income falls under the taxable band is eligible for Form 16
according to regulations released by the Indian Government's Finance Ministry.
If an employee's income does not fall within the tax rates established, Tax Deducted at Source
is not required (TDS). As a result, in certain situations, the employer is not required to give
Form 16 to the employee.
However, many organisations now provide this certificate to employees as a good work practice
because it contains a consolidated picture of the individual's earnings and has other
applications.
As per the procedure laid down by the Income Tax Department, the person deducting your tax files returns with the government. Thus, The TDS entries get updated in the department’s database once your employer files the TDS return. The last date to deposit the TDS for the month of March is April 30. The TDS return for the last quarter (Jan to March) is to be filed latest by 31st May. After the TDS return is filed, it takes 10 to 15 days to reflect the entries in the department's database. Then after, your employer downloads the Form-16 and issues it to you.
Form 16 is issued by your employer and you can expect it by the end of May/June. But if it’s not issued by the end of June, then you may demand it from your employer. Generally, the accounts or HR department issues Form 16.
In case, If any person dosen’t receive his Form 16 and has got his TDS deducted then he/she may intimate the same to the Jurisdictional A.O. who may take appropriate action for same and if found employer guilty then carry out other further proceedings including levy of penalty
Form 16 is the most important document for you to file your income tax return and you should preserve this document carefully. But if you’ve lost it, do not panic, check your mail, whether it has been emailed to you by your employer or not. If it’s not sent to you on your email, then you can simply request your employer to issue a copy of Form 16.
Yes, an income tax return can be e-filed even without income tax form 16, you are required to have all the necessary documents of your sources of income, any perquisites, allowances claimed, investments made, medical payments and any donations made.
If your Gross Total Income exceeds 2,50,000 then it is mandatory to file an income tax return. Your employer is liable to issue form 16 only when he has deducted tax from your salary. If your employer does not deduct tax and your income exceeds the specified limit then even if you don’t have form 16, you are required to file your income tax returns.
There are various other conditions also, other than income above 250000 due to which a person would be mandatorily required to file ITR, major those are:
If you haven’t received a Form 16, then for the purpose of return filing, you will have to refer to your salary payslips, bank statements, tax-saving investment proofs, home and education loan certificates and Form 26AS etc for filing income tax returns. While payslips contain details of your income like basic salary and allowances, Form 26AS contains the details of all your tax deducted and tax paid.
The Form 26 AS can be viewed/downloaded from the Income Tax Department’s online portal i.e. https://www.incometax.gov.in/iec/foportal
For example Ms. Tania was working with XYZ Ltd. and she didn’t receive any Form 16. In such a case, she consulted experts and they calculated the income on the basis of her monthly payslips which showed a basic salary of Rs. 30,000 per month. It also had details of transport allowance of Rs. 2,000 per month. Further, she had her home loan certificate, because of which she was allowed a deduction of Rs. 50,000 from her income. Hence, the final calculated income of Ms. Tania would be calculated as follows:
Basic Salary = 30,000 x 12 months = 3,60,000
Transport Allowance (after introduction of standard deduction transport allowance is fully
taxable subject to the following exceptions:-
blind/deaf/dumb or orthopedically handicapped with disability of lower extremities and
allowance is for commuting from place of residence to place of duty for an employee.
Transport allowance for employee of transport business for meeting personal expenditure during
the running of such transport Considering that Tania falls under no such case = 2,000 x 12
months = 24,000 is taxable.
Hence, the Taxable Income [after deducting the basic exemption limit] of Ms. Tania will be
Rs.34000 (3,60,000 + 24000 – 2,50,000 (basic exemption) – 50,000 Standard deduction -50,000
deduction for home loan).
In such a case, it may be possible that your employer has deducted the tax from your salary but
has not deposited the same in the credit of the Government account. ou must pay the full amount of
tax while filing your income tax return. Also, you should immediately bring this matter or default
to the notice of your employer.
Further, the employee should intimate the same to the Jurisdictional A.O. who may take
appropriate action for same and if found employer guilty then carry out other further proceedings
including levy of penalty.
(As per Gujrat high court decision on 30/11/2021 in case of Kartik Vijaysinh Sonavane v. DCIT
- [2021] , it was held that TDS benefit would be given to employee even in case TDS has not been
deposited by employer)
Need a CA to bail you out of this situation? Connect Now.
In a case where your employer issues you a Form 16 without any deductions, you can still claim
the deduction on your income tax return. Form 16 is just a certificate issued by your employer
which certifies deduction of tax (TDS) on your salary. It’s just a base document for return filing
and not the final return itself. You can always take the benefit of the deductions you are
eligible for while filing your income tax return even if the same is not mentioned in your Form
16.
Our experts say “Always remember to check whether the House Rent Allowance exemption has been
taken in Form 16 or not (if you’re entitled to it). It is usually either not reflected or
calculated at a wrong value especially in the case of multiple employers during the year. In such
an event, you yourself can calculate it and take the exemption of same while filing your income
tax return.” However, while claiming any such deduction which is at variance in value w.r.t. form
16 , income tax site will show a message which can be seen in the image shown below:-
Trouble filing your income tax return? Just click here!
If you have received arrears of salary, but the arrears are not shown in Form 16, then also you can show your arrears in the income tax return. All you required is all the details of salary in arrears and Form 10E which is required to claim relief on arrears of salary under section 89(1).
You can upload income tax form 16 and e-file your return with Tax2win by following some simple steps:
In case, where a Form 16 is duly issued but with a mistake, then the same can be rectified by your employer on your request. Subsequently, a revised Form 16 will be issued to you by your employer.
Form 26AS | Form 16 |
Contains details of tax deducted at source (TDS) for all the heads of income. | Contains details of tax deducted at source (TDS) for the income from salary only. The details of other heads of income can also be provided in your Form16, in case you have provided the details of other income to your employer. |
Provided on the Department’s site based on data submitted by all the Deductors. | Issued by your employer to you. |
No, a Form 16 is not equivalent to an Income Tax Return but it’s the source document for your salary income. It is really helpful, especially in case your entire income is from salaries and there is no other source of income. Further, you don’t need to attach your Form 16 with your income tax return.
In case, you had two employers for the year, you will get Form 16 from both the employers for
the respective months served by you. The income tax return will be filed by combining the details
of both the Form 16s. But you must be careful in doing so because it might happen that both your
former and present employer has calculated your tax after taking into consideration the basic
exemption limit. In such a case, you are not entitled to take the benefit of the exemption limit
twice, but only once.
The same applies to all deductions and allowances during the year, as any deduction/allowance can
be claimed only once or as per the respective rules of the income tax law even if it is reflected
in both the Form 16’s.
For example, in the year 2021-22, you worked with a company X Pvt. Ltd. for a period of 6
months for a salary of Rs. 45,000 per month and for the rest 6 months you joined Y Ltd. for Rs.
50,000 per month. In such a case, you draw a salary of Rs. 2,70,000 from X Pvt. Ltd. and Rs.
3,00,000 from Y Ltd. Now, both the companies X Pvt. Ltd. and Y Ltd. will deduct your tax after
consideration of the basic exemption limit (i.e. Rs. 2,50,000/-) only and your Form 16 will be
based on the same.
This means X Pvt. Ltd. will charge tax on the balance of Rs 20,000 and Y Ltd. will charge tax on
Rs. 50,000, each giving you an exemption of Rs. 2,50,000. But, at the time of filing your final
return for the year, you will be allowed the basic exemption only once and not twice i.e., your
tax should be charged on Rs. 3,30,000. (Rs. 300000 + 270000 – 250000).
Further, when you switch
jobs in a year, then you should furnish your previous employer’s TDS details to your new employer
in Form 12B.
Form 60 is a declaration made by individuals who do not have PAN whereas Form 16 means an income certificate issued by the employer to an employee.
Form 16B is a certificate of tax deducted on sale of the property whereas part b of income tax form 16 consists of all the details of salary breakup, deduction and taxes paid by an employer on behalf of employees.
Form 16 is a TDS certificate & it is issued only when there is tax deducted. Therefore, if there is no tax deducted, the employer is not required to issue Form 16 to you. The purpose of form 16 is to serve as proof of tax deducted & deposited on your behalf. However, many employers especially corporates issues form 16 irrespective of the fact whether tds has been deducted or not
Form 16 is required when you are filing your income tax return. This form serves as proof that your employer has deducted & deposited tax from your salary with the income tax department in your name.
All the employers, if they deduct TDS, are required to issue Form 16 by 15th June of the financial year.
Any amount received from your employer during the employment period is called Salary. Usually, it comprises of basic salary, allowances, bonus, pension, wages or any other benefit given in relation to your employment.
When an employer deducts tax from your salary, he issues Form 16 to you. This form is an acknowledgement from your employer that he has deducted tax from your salary.
Yes, pension income is taxable under the head “Income from Salary”. If it exceeds the basic exemption limit then provisions of TDS shall become applicable & Form 16 is required to be issued by your employer. Further, pension received from United Nations Organisation & by kind of Armed Forces is exempt. For a detailed explanation of the taxability of pension.
No, family pension is not taxable under the head “Income from Salary” because it comes within the ambit of “Income from Other Sources”. Therefore, Form 16 is not required to be issued in such cases.
Yes, your employer is required to consider Sec 89 of the Income Tax Act for calculation purposes, in case you receive any arrears or advance salary income.
At tax2win, for filing an online income tax return you can choose amongst the two available options as per your convenience. If you wish to opt for eCA then you just have to answer a few simple questions & accordingly we will recommend the best suitable plan for you. Pay online for your plan & our eCA will get in touch with you. Share all your tax problems, upload relevant documents & let your personal eCA do the hard work for you.
You need to verify your ITR within 30 days of filing it so that the Income Tax Department can process it further. It is very important to note, if you do not verify your ITR it shall not be considered as filed.
Both Form 16 & 16A are TDS certificates. While Form 16 is a representation of tax deducted for salaried employees, Form 16A represents tax deducted on income other than salary.
You can visit our glossary page on Form no. 16. Here, you can see the full structure of Form 16 & see all the components of it.
Form 16 issued by the Municipal Corporation of Greater Mumbai (MCGM) is known as Form16 MCGM. To download Form 16 MCGM, all you need to do is:
Income tax slab rate for A.Y. 2022-23 for individuals is:
Income of the assessee | Rate of Tax under Existing Regime for FY 2021-22 | New Regime Slab Rates for FY 2021-22 | ||
---|---|---|---|---|
Individuals with age less than 60 years or HUF | Individuals with age 60 years or more but less than 80 years | Individuals with age 80 years or more | Applicable for All Individuals or HUF | |
Rs 0.0 to Rs 2.5 Lakhs | NIL | NIL | NIL | NIL |
Rs 2,50,001 to Rs 3.00 Lakhs | 5% (tax rebate u/s 87a is available) | NIL | NIL | 5% (tax rebate u/s 87a is available) |
Rs. 3,00,001 to Rs 5.00 Lakhs | 5% (tax rebate u/s 87a is available) | NIL | ||
Rs. 5,00,001 to Rs 7.5 Lakhs | 20% | 20% | 20% | 10% |
Rs 7,50,001 to Rs 10.00 Lakhs | 20% | 20% | 20% | 15% |
Rs 10,00,001 to Rs. 12.50 Lakhs | 30% | 30% | 30% | 20% |
Rs. 12,50,001 to Rs. 15.00 Lakhs | 30% | 30% | 30% | 25% |
Exceeding Rs. 15 Lakhs | 30% | 30% | 30% | 30% |
An employee should verify the following details before filing the income tax return:
Form 16 is issued by the employer to the employee therefore, an employee can get Form 16 from the employer of any year.
Form 16 helps companies to verify new package, incentive, bonuses. It helps in verifying previous employer details and tenure of working with the previous employer.
pension holders can get their form 16 from the respective bank. Because they are responsible for deducting TDS on the income amount.
It will get 10 to 15 days for correction form 16 from the site.
Yes, you are still liable for form 16 if TDS is deducted or not.
No, Form 16 can only be given by the employer
Form 16 and ITR acknowledgement are different things. ITR acknowledgement is a document that your return is successfully submitted with the department and form 16 is issued by the employer to employee
Form 16 is not necessary for filing income tax returns. for filing an income tax return you only need income details.
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