esm7i You may be familiar with Form 16 if you are a salaried employee. It is important to have this document handy when tax season rolls around every year. If you are starting out on your personal finance journey, it’s possible that you don’t know what this form is or why it is so important for salaried people.
It is important to understand what Form 16 is, how it works, and why you will need it. Here is a quick overview of all the important things about Form 16, as well as how it works.
What is Form 16
Employers must deduct at-source tax from any employee’s salary whose annual income is above the basic exemption threshold, which is Rs. 2.5 lakhs. The employer deposits this TDS to the government against the PAN of the employee concerned. Form 16 shows the tax deducted from the source of such employees.
This certificate is given by employers to employees who are salaried under Section 203 of the Income Tax Act 1961. Suppose you’re a salaried worker earning more than Rs. This certificate may have been issued to you by your employer if you are a salaried employee earning more than Rs. This certificate tells you how much tax has been deducted during the year from your salary.
Part A and Part B of Form 16 contain the information. What can you find in each component? Below are the main details.
Form 16 Part A
Part A of Form 16 provides you with information on the amount of tax that was deducted from your salary during each quarter. You will receive separate Form 16 Part A from each employer if you change jobs during a financial year.
This is a list of key information that you will find in Form 16 Part A.
Name and address of the employer
Name and address of the employee
Employer PAN (Permanent account number)
The employer’s TAN (Tax collection account number)
Employee PAN
Period for which the employer has calculated tax on salary
The total amount of salary paid and the tax deducted (TDS) for each employee.
Form 16 Part B
Part B of Form 16 is an appendix to Part A. This part of Form 16 contains details about your salary breakdown and the deductions you’re eligible for under Chapter VI-A. This section also includes information on whether you’ve chosen the old or new income tax regime.
The Part B of Form 16 contains some key insights.
om Savings Accounts is Deductible
When does Form 16 become available
Form 16 is required by employers annually, as it contains details about the tax withheld from salaries during the financial year. Employers usually issue Form 16 at the end of a financial year.
The deadline for submitting Form 16 is June 15 in the following financial year. For example, Form 16 for FY 2021-22 must be issued by or before June 15, 2022. The employees will have enough time to use their Form 16 details to file their ITRs by the July 31 deadline.
If your employer fails to issue Form 16 by the deadline or delays its issuance, they may be subject to a fine of Rs. If your employer is late or in default, they will be liable to pay a penalty of Rs. The penalty cannot exceed the amount of tax deducted.
How do you get Form 16
As Form 16 is an official document issued by your employer, you will receive it directly from them, whether in hard copy or soft copy. Some employers make Form 16 accessible to employees via their online payroll platform. You can download Form 16 from your employer’s platform if this is your policy.
How to download Form 16 from Traces
The Income Tax Department provides TRACES, an online web application. This portal allows payers and TDS deductors to view their taxes online, reconcile differences before filing returns, and request refunds if necessary. This web-based platform also offers Form 16.
You cannot download Form 16 as an employee from the TRACES Portal. Employers can only do this, as they are the ones who deduct tax at source. If you are an employee, you can still download Form 16 at TRACES.
Visit the TRACES portal login page at tdscpc.gov.in/app/login.xhtml
Log in with the employer’s login ID, password, and the TAN (taxpayer identification number) of the deductor.
Click on the “Downloads” tab.
Look for the “Form 16” option.
Fill in the details required for the employee, such as name, address, and PAN.
You will need to enter the details of your employer.
The generated Form 16 will be available for download or can be sent directly to the employee.
