Introduction: Form 16

Form 16 is an imperative printed material given by Indian managers to their workers, which acts as prove of pay gotten and Charge Derivations at Source (TDS) carried out in a financial year. This record contains all the fundamental data required by the representative when submitting their ITRs to the Wage Charge Office of India. To record your pay assess returns precisely, it is significant for you to comprehend the reason and method of downloading Form 16.

What is Form 16?

Form 16 is an archive given by managers in India to their salaried employees. Frame 16 is utilized by salaried specialists to yield their wage charge returns. Concurring to Area 203 of the Pay Assess Act, 1961, managers are required to grant Shape 16 to their representatives. This form gives an intensive outline of the employee's compensation and the charge deducted at source (TDS) by the manager. 

Also Form 16 plays a significant role when it is come to filling the income tax return for salaried individuals. Form 16 has two components in form 16, it has part A and Part B.

Simply put, this Form 16 is a certificate that provides an all detailed summary which is mentioned bellows following in a particular year such as (April to March).

• The salary earned by an any employee 
• Allowances 
• Deductions
• Taxes paid on the employee’s Behalf

Also we can say this the Form 16 is a conformation and evidence of the TDS (Tax Department at Source) and for another any important information for your income for filling an (Income Tax return).

It also play a vital role during the ITR filling process. It make you to enables the exact reports and your income and deduction and eligible for claim tax refunds from the income tax department.

What s Part A Form 16?

Part A Form 16 gives a details of TDS deducted and also deposited annually details of PAN and TAN of the company employer and their information. An employer also can generate and download this important part Form 16 through TRACES portal. The Employer should also can authenticate the contents before using it.

It’s also an important to note that is if you change your job in a one financial year, also one of each employer will issue a separate Part A of Form 16 for the whole period of employment. There are several of the components of part A are mentioned below:

• Name and address of the employer
• TAN and PAN of employer
• PAN of the employee
• Annually summary of total salary payments for the concerned financial year
• Summary of tax deducted and deposited quarterly, which is certified by the employer

What is Part B Form 16?

Part B of this Form 16 is an Annexure to part A. Party B is to be ready or prepared by the company employer for their employees and at contains the whole detail of the breakup salary and deductions approved under chapter 6th-A

If you change your job in a one financial year, you can should take a Form 16 from both employers. Some of the components of Part B are mostly newly which are mentioned below:

• Detailed breakup of salary
• Detailed breakup of exempted allowances under Section 10
• Deductions allowed under the Income Tax Act (under chapter VIA):  

The list of deductions mentioned is as below:

• Deduction for life insurance premium paid, contribution to PPF etc., under Section 80C
• Deduction for contribution to pension funds under Section 80CCC
• Deduction for employee’s contribution to a pension scheme under Section 80CCD(1)
• Deduction for taxpayer’s self-contribution  to a notified pension scheme under Section 80CCD(1B)
• Deduction for employer’s contribution to a pension scheme under Section 80CCD(2)
• Deduction for health insurance premium paid under Section 80D
• Deduction for interest paid on loan taken for higher education under Section 80E
• Deduction for donations made under Section 80G
• Deduction for interest income on savings account under Section 80TTA.
• Tax calculated, surcharge, education and heath cess charged, and relief under section 89.

How can Form 16 Gives you an advantages?

This Form 16 also can work as your salary ‘from income’ statements, which is also give you various types of authorities/companies /organization on the demand of companies. And also their uses are mentioned below:

• Help in Filing Income Tax Return (ITR)
• Proof if income
• Documents announce the how can be your tax was computed and recheck any anomalies
• There is one place to check all your tax-saving investments
• Loan assessment’s and get approval
• Issuance Visa
• For switching job: it also help to the next employer computer your tax is only based on what your previous employers has been already deducted
• Since all the documents is should be related to tax credit, also you can easily check for any overpaid taxes, which also helps you to claim your all refunds, if any 

Why Form 16 is required?

As mentioned above details that form 16 is an important as:

• Evidence that your employer has deducted charge and sent it to the government.
• Helps with completing your assess return for the Pay Charge Department.
• Verification of profit from work
• Numerous banks and budgetary institutions require Frame 16 as verification of a person's personality when they are applying for loans.
• Every person who gets a settled compensation can ask Shape 16 from their manager by June 15th. If a manager does not issue Shape 16 by the due date, they must pay a punishment of Rs.100 per day until the issue is settled.

What are the key features of Form 16

Form 16 is an issued documents under the Income Tax India act, and also it play a vital role and it also a proof of Tax Deduction at Source (TDS) by an employer, as per the behalf of Income Tax department.

The key feature components and their details are mentioned below:

What are the important Terms of Form 16?

How to Download Form 16?

TRACES (TDS Reconciliation Analysis and Correction Enabling System) is an online website given by the Income Tax Department of India. It’s used to manage TDS- related activities and work which provides services to employers, taxpayers, and another stakeholder. This site give permissions the company employers to download Form 16 part A&B.  To download Form 16 from the above mentioned is TRACES, the steps are mentioned below follow the steps:

Step-1: Visit the official TRACRS website

Step-2: Complete the registration process and trying to create a new account and if you already being registered and enter the PAN number (user ID).

Step-3: Find to the “Download” tab and select the FORM 16

Step-4: Select the Form Type and Select the date of the mentioned TDS

Step-5: Verify and recheck the PAN details and other details 

Step-6: After this enter the TDS receipt number and find the date of the TDS

Step-7: Add the total tax detected and collected 

Step-8: Press or click on submit to request for download the form

Step-9: After the completing the whole procedure download the files which comes under the ‘DOWNLOAD’ tab once the form is available for download

What Are The Important Details When Filling Your Return?

With any references to the image below here is where you can easily locate a certain information for filling your income tax return for FY 2023-24 AY (2024-25)

• Allowance execute which comes under the section 10
• Break down of deduction also it comes under the section 16
• Taxable salary
• Income from the house property reported by a company employee an offered for TDS
• Income comes under the head ‘other sources’ offered for the TDS 
• Break down all the section 80c (gross and deductible amount) deductions

Tax also Payable or refundable due 

You can also find the additional further information of your employee in your FORM 16 while filing your annual, final return like as:

• TDS deducted by the employer
• TAN of employer
• PAN of employer
• Name and address of employer
• Current assessment year
• Your PAN

Read Our Blog: Form 15G and Form 15H helps To Save TDS on Interest Income

What are the Eligibility Criteria for Form 16?

According to the conditions for Form 16 outlined by the Indian government's Finance Ministry, every employee of a company who receives or affect taxable income is eligible to receive Form 16. 

If their revenue decreases outside of the specified tax bands, they won't be subject to Tax Deducted at Source (TDS). Thus, the corporation is not obliged to furnish Form 16 immediately in such cases. 

But as a best practice, a lot of businesses are choosing these days to provide this paper to their staff. It gives a thorough breakdown of the person's income and adds more modern conveniences.

Read Our Blog: Section 195 of Income Tax Act – TDS on Non-Resident Indians

When will the Form 16 be Available for FY 2023-24?

The pending or due date to issue of this Form 16 is 15th June 2024. If your company or organisation employer want to deducted TDS from April ‘23 - March ’24, then they have Form 16 must be issued by 15th June '24. And in any case If you lose your Form 16, you can easily  request a duplicate from your company employer.

Conclusion

All information which mentioned above about Form 16 is a great significance and provides most valuable information. Not only does it assist with filing income tax returns, but it is also be very useful for an applying for such as loans, term insurance, and another purposes. Once if you get your Form 16 from your employer, be sure to store a duplicate.