Understanding Form 16

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At the time of filing Income Tax Return (ITR), one of the most important documents for employees is to have Form 16. The document helps one see how much tax has already been paid, and what is due to be paid. Suppose your income exceeds the basic exemption level of Rs 2,50,000 for the financial year, in that case, your employer is obligated by the Income Tax Act to deduct TDS (tax deducted at source) from your salary and deposit it with the government. All this information is provided in detail in your Form 16. Let’s understand what is Form 16:

Form 16

In simple terms, Form 16 is a certificate in which your employer certifies the amount of salary you earned throughout the year and the amount of TDS deducted. It is divided into two parts – Part A and Part B.

Part A contains information on the employer and employee, such as their names and addresses, their PAN and tax deduction account number (TAN) numbers, the duration of their employment, and the amount of TDS deducted and deposited with the government. Part B contains information about the salary paid, other income received, deductions allowed, and tax payable, among other things.

-If you have revealed income from other sources to your employer, your overall income will be considered for TDS deduction.

-If your income is less than the basic exemption threshold, your employer will not take -TDS from your salary and may not send you this form.

-If you worked for multiple employers over the year, you will have multiple Form 16.

Points to note

-The employee can get Form 16 from their employer. Even if you’ve resigned, your employer will supply you with Form 16. Unfortunately, this income tax form 16 is not available for download anywhere.

-Once an employee receives Form 16, it is the employee’s obligation to ensure that all of the information contained therein is accurate.

-Along with checking the taxpayer’s personal information and the amount of income and TDS deducted, the most critical item to verify on Form 16 is the taxpayer’s PAN number.

-If it is incorrectly stated, the individual should immediately contact the organisation’s human resources/payroll/finance department to get it corrected.

-The employee’s employer will provide a corrected and updated Form 16. Additionally, the employer would need to correct the situation on their end by filing a new tax return to credit the TDS proceeds to the correct PAN.

-If your employer has not deducted TDS, he may not provide you with a Form 16.