What is Form 16? Why is Form 16 needed to fill income tax return?

about form-16

about form-16

The last date to file income tax returns for individuals is July 31 for individuals and for businesses the date is September 30. Form 16 can be described as the TDS (tax deducted at source) certificate that is issued to you by your employers after they deduct the same. When TDS is deducted by employers on salaries they are required by the Income Tax Act to provide a certificate to you for the same. This certificate provides complete details of the tax that has been deducted and then deposited.  There are two parts of Form 16 that may be explained as below.

Parts of Form 16

There are two parts of Form 16 – Part A and Part B. In Part A you have the TAN (tax deduction and collection account number) number of the employer as well as PAN (permanent account number) number of you as well as your employer. It also mentions your name and address as well as that of your employer. Apart from that it mentions the time you have worked for an employer as well as the assessment year.

Part B is more important than Part A since it has consolidated details of the salary that has been paid to you in a financial year. It mentions the details of your salary breakup as well as deduction that you can claim under Section 80. Deductions under Chapter VIA would include details of amounts that you have claimed as per Section 80C for EPF, NSC, PPF, and premium of life insurance. Under Section 80D you can claim deductions for premium payments of health insurance.

Requirement of Form 16 to file income tax return for a salaried employee

Any employer who is paying salaries is supposed to deduct TDS on the same as well. However the Income Tax Act mentions it quite clearly that any person who deducts TDS from his employees’ salaries should provide them certificates in the shape of Form 16. This shows that the tax has been deposited with the central government. The employer needs to mention the amount that has been paid as well as other particulars that are supposed to be provided in this case. Normally it is mandatory for an employer to provide you a Form 16 in cases where TDS is being deducted but if they are not doing so then there is no need to provide one.

What if you do not have Form 16?

Even if you do not have Form 16 it does not mean that you do not need to file your ITR. It is true that it is the responsibility of your employer – deducting taxes from your salary and giving you the TDS certificate – you need to take responsibility in case your employer is not doing so, and prepare a tax report and file it with the Income Tax Department. This is applicable however when your aggregate income in a financial year is greater than the minimum taxable income. You can get this done by an income tax lawyer or do it yourself. In case your employer has not deducted taxes then you need to do that as well.