(Income Tax) Understanding Form 16
Form 16 is the most important document for figuring out the income tax liability for a salaried person. In this document we cover the importance and detail of form 16.
What is Form 16?
Form 16 is a document provided by employer (company) to its employees at the end of every financial year (April to March) in India. It details all TDS (tax deducted at salary) cut by the company and contains all relevant details including your total salary, your PAN, and deductions considered while calculating your income tax. Your employer is supposed to give you Form 16 before May 31st of every year.
Form 16 in Details
Form 16 has two parts - Part A and Part B.
Form 16 Part A contains following main facts:
- Name, address, TAN & PAN of company
- PAN of the employee
- Summary of tax deducted & deposited by the company
- Period of employment with the company
Form 16 Part B contains following main facts:
- Details about the salary paid to you (Gross salary, perquisites, Leave Travel Allowance etc)
- Details about Deductions considered (section 80C, 80CCC, 80CCD, and others)
- Details about your total taxable salary and calculated income tax
What to verify in Form 16?
It is important to ensure the company has successfully deposited the TDS cut from your salary to income tax department. To verify this, please get your form 26as from income tax website and match the number reported
If you have changed your job during the year, you will need to get form 16 from each of your employer and cross check against form 26as.
If your income is below taxable limit, your employer will not cut any TDS from your salary. In such case, employer won't provide form 16 to you and it is perfectly fine.
Use of Form 16 in Income Tax Filing
Form 16 is the most important document while filing income tax return for salaried people. While filing your return, you need to fill details like 'gross salary', '80 C Deductions' etc which are directly given in your form 16.
Now-a-days you can easily income tax online on IncometaxIndiaEfiling website. If you don't have any other income apart from one mentioned in form 16, then you can directly go and file the income tax online (using ITR-1) on the website itself.Category: finance income-tax