- What is a Form 16 in Income Tax?
- What are the components of Form 16?
- What is Form 16A or Part A of Form 16?
- What is Form 16B or Part B of Form 16?
- What are the details required from Form 16 during return filing?
- How do I file income tax return if I don’t have my Form 16?
- What is Income Tax Form 12B?
- What is Income Tax Form 12BA?
- When the employer deducts TDS and does not issue a TDS certificate?
- Frequently Asked Questions
What is a Form 16 in Income Tax?
Form 16 in income tax is a TDS certificate that every employer must issue to its employees under section 203 of the Income Tax Act, 1961. The employer must mandatorily issue it on or before 15th June of the next financial year. Example- If the TDS is deducted in the FY 2019-20, Form 16 must be issued on or before 15th June 2020 i.e. FY 2020-21
Every individual with an income exceeding Rs 2.5 lakh is liable to pay taxes. The employer of these individuals is responsible for deducting TDS every month. Usually, the TDS is deducted on a projection basis of income, investments, and tax exemption to be claimed by the employees. In the month of March, the balance TDS is deducted on the basis of actual taxable income.
The TDS deducted and deposited with the Income Tax department is recorded per employee and issued in a certificate to the employees.
Form 16 contains details of the income earned, the break-up of salary, tax exemption, and investments made during the financial year. It is often referred to as a salary certificate by the salaried individuals. The certificate is good enough to prepare your income tax return and file it.
What are the components of Form 16?
Form 16 contains 2 parts, Part-A and Part-B. Part-A consists of the basic information about the employer and the employee like PAN, TAN, address, financial year, assessment year, tax deducted at source, etc
While Part-B consists of information relating to the other income earned during the FY, tax exemption, salary, net tax payable, etc.
Below are a few components of Form 16:
- Details of the employer i.e. name, address, TAN, PAN, etc
- Details of the employee i.e. name, address, PAN, etc
- Gross salary, perks, and perquisites, expense allowances, etc
- Total tax payable by the employee
- Total TDS deducted and collected along with the TDS challan number
- Other income earned by the employee, income from the previous employer.
What is Form 16A or Part A of Form 16?
An employer generates and downloads Part-A of form-16 from the Traces website. Before issuing this part to the employee, the employer must always authenticate the contents of the form generated.
The following are the components of Part-A of Form-16:
In case you have left your job during the financial year, the employer will still issue Part-A of Form-16 for the period of employment
|Basic details of the employer||Name and address of the deductor i.e employerPAN of the deductor i.e. employerTAN of the deductor i.e. employer. The TAN is an account that is assigned by Traces to a taxpayer responsible for collecting and deducting the taxes.|
|Basic details of the employee||Name and address of the employeePAN of the employeeEmployee reference number. This is provided by an employer to an employee.Assessment Year. An assessment year is a year succeeding in the financial year. Example- For FY 2019-20, the assessment year is 2020-21Period with the employee. This is the period for which the employee was underemployed with the employer.|
|Summary of the amount paid to the employee and taxes deducted||Quarter. The quarter for which amount is paid to the employee as a salary and tax deducted at sourceThe receipt number of quarterly TDS statements. This is the reference number of TDS return submitted by the employerAmount paid/ credited. This is the salary amount paid to the employer for the quarterAmount of tax deducted i.e. Tax deducted at sourceAmount of TDS deposited|
What is Form 16B or Part B of Form 16?
Part-B of Form 16 is a consolidated statement of salary and net taxable income. Part-B is an annexure of Part-A. The following are the contents of Part-B:
- Gross salary. Gross salary is the basic salary + DA along with perquisites. The total value of perquisites is mentioned in Form 12BA
- Allowance exempt under section 10. The allowances such as house rent allowance, transport allowance, cash equivalent of leave travel allowance, etc
- Deduction under section 16:
- Standard Deduction
- Entertainment allowance
- Tax On employment or Profession Tax
- Income Chargeable to tax under the head ‘Salaries’
- Other income reported by the employee
- Income from house property
- Income from other sources
- Deductions allowed under chapter VIA of the Income Tax Act, 1961
- Total taxable income
- Rebate u/s 87A, if applicable
- A surcharge, if applicable
- Health and education cess
- Relief under section 89
- Net taxable payable
The deductions under section Chapter VIA notability mentioned in the form are the following:
- Deduction in respect of life insurance premia, contributions to provident fund, etc. under section 80C
- Deduction in respect of contribution to certain pension funds under section 80CCC
- Tax exemption in respect of contribution by the taxpayer to a pension scheme under section 80CCD (1)
- Deductions in respect of amount paid/deposited to a notified pension scheme under section 80CCD (1B)
- Tax benefit in respect of contribution by an employer to a pension scheme under section 80CCD (2)
- Tax benefit in respect of health insurance premium under section 80D
- Deduction in respect of interest on loan taken for higher education under section 80E
- Total Deduction in respect of donations to certain funds, charitable institutions, etc. under section 80G
- Tax benefit in respect of interest on deposits in savings account under section 80TTA
What are the details required from Form 16 during return filing?
The following are the information you need from Form 16 while filing an income tax return:
- Exempt allowances u/s 10
- Deduction u/s 16
- Taxable Salary
- Income from house property offered for TDS
- Income from other sources offered for TDS
- Deduction u/s 80C
- Other deductions
- Rebate and relief claimed
- Surcharge and cess payable
- Net taxable income
- Net tax payable/ refund to be received
Other information required during return filing:
- Total TDS deducted
- TAN and PAN of the employer
How do I file income tax return if I don’t have my Form 16?
No doubt Form 16 is important and must have in order to file an income tax return, you still have to figure out a way to file ITR. Follow the instructions given below to file income tax return without Form 16:
- Collect your payslips for the 12 months from April till March. Compute the gross salary received.
- Claim the HRA, if you are living in a rented apartment. You can use our HRA calculator to calculate the amount.
- Claim all the deductions under section 80C.
- Claim all the other deductions
- Add income from sources other than salary
- Download Form 26AS from incometaxefiling website. Read a complete guide on Form 26AS
- Deduct the TDS already deducted from the net payable.
- Pay the additional taxes, if any
- Finally, submit returns online on the Income Tax Department website.
What is Income Tax Form 12B?
The Income Tax Form 12B is applicable to salaried individuals who switch their jobs within the same financial year. So, in case you have changed your job you will have to furnish Form 12B to your current employer. Form 12B contains the details of salary income earned from your previous income by the salaried individuals
The following are the components of Form 12B:
- Basic details of the employer:
- Name and address of the deductor i.e employer
- PAN of the deductor i.e. employer
- TAN of the deductor i.e. employer. The TAN is an account that is assigned by Traces to a taxpayer responsible for collecting and deducting the taxes.
- Details of income
- Gross Salary
- Allowances and perquisites
- Deductions u/s 16
- Allowances exempt u/s 10
- Profession Tax
- Deductions under Chapter VIA
- Net taxable salary
- TDS deducted by the previous employer
Although the Income Tax Act does not mandate submission of Form 12B, it is advisable to submit it. By submitting it you will ensure that your TDS deducted is on total income and avoid paying interest on self assessment tax later.
What is Income Tax Form 12BA?
The perquisites are additional benefits that an employer may provide to its employees. An employer mandatorily provides Form 12BA irrespective of paying any perquisites. It contains the details of perquisites and taxable amounts. The Income Tax Act lays down rules for the taxability of these perquisites.
Value of Perquisites:
- Value of perquisite as per rules
- The amount, if any recovered from the employee
- Amount of perquisite chargeable to tax
Common perquisites are listed below:
- Interest free or concessional loans
- Free or concessional travel
- Credit card expenses
- Stock options
- Free meals and Free Education
Details of tax:
- Tax deducted from the salary of the employee u/s 192(1)
- Amount of tax paid by an employer on behalf of the employee u/s 192(1A)
- Total tax paid
When the employer deducts TDS and does not issue a TDS certificate?
The Income tax Act mandates that every employer must first deduct tax and then pay the salary to its employees. Furthermore, it also mandates that every taxpayer liable to deduct TDS and who deducts TDS must file a TDS return. Along with TDS return, it also mandates that employers must issue Form 16. Hence there is no room for any default here.
Moreover, even if the employer defaults in deducting TDS or issuing form 16, the employee will still be responsible for filing returns online or offline and paying taxes.
Frequently Asked Questions
Form 16 can be given only by your employer. In case you have left the job in the financial year, the employer is entitled to provide you with Form 16. Unfortunately, Form 16 cannot be downloaded from any portal neither incometaxfiling website nor the Traces website.
An employer is liable to deduct and deposit TDS only if the employee has a taxable income. And an employer will issue Form 16 only if TDS is deducted. Hence, your employer might not issue you a Form 16 in case of nil taxable income.
You can surely get Form 16 for any previous years from the employer. However, in case you do not get it, you can anytime download Form 26AS. Form 26AS will help you with the TDS deducted and deposited TAN, and PAN of the employer.
The employer will mandatorily deduct TDS in case you have a taxable income. Your employer might fail to deduct TDS or issue you your Form 16.
However, you will still be required to pay your taxes and file ITR. This has been made very much clear by the Income Tax Department. In case of default in payment of taxes and filing of Income tax return, you will have to pay interest and penalty for the default.