Have you just started earning and don't have any idea how to file your taxes? Do you rely on an agent to file your taxes for you? Have you just heard a discussion on Form 16 and want to know what that is?
It is always handy to know more about Form 16 and how to use the form to file your tax returns. mymoneykarma saves you the hassle of searching and tells you all you need to know about Form 16.
Form 16 is an agglomerate certificate issued by your employer, describing the TDS that has been deducted from your salary along with other information required to file your income tax return. Form 16 is released once a year before June 15th. It has two components - Part A and Part B. In case you misplace or lose your form, you can obtain a duplicate form from your employer. Your company can either issue you a hard copy of the form, or you can download Form 16 from the company website using your login credentials.
Form 16 A
Form 16 A consists of crucial financial identification of the employee and the employer. The information given in Form 16 A includes:
TAN & PAN of your employer
Name and address of your employer
PAN of the employee
Summary of tax deducted from the employee's salary and deposited quarterly, which is certified by the employer.
Your employer issues you a Form 16 by downloading it through the TRACES website. If you have changed jobs more than once in a financial year, each employer will issue their own Form 16. You would need to collate that information when you file your taxes.
Form 16 B
Form 16 B is an annexure to Part A, which specifies the various deductions under the Income Tax Act. It includes the following information:
Detailed breakup of your salary
Deductions allowed under the ITA
Relief under section 89
If you change your job in a financial year, then you need to decide if you want Part B of the Form from both of your employers or just from the previous employer.
Form 16 is necessary documentation that you need in every walk of life. It is proof of the fact that you diligently pay your income tax regularly. Apart from this, it is also essential for the following purposes.
Loans: Most loans, such as home loans and two-wheeler loans, require Form 16 receipts as a part of their documentation.
Insurance cover: Many high-end medical and life insurance covers need a copy of your Form 16 for processing your request.
Every employer provides Form 16 to their employees. You can get yours from your employer. Even if you quit your job, your employer is bound to provide it to you. Unfortunately, this income tax Form 16, cannot be downloaded from anywhere.
1. If there is no TDS, is my employer required to issue me Form 16?
The TDS certificate in Form 16 is issued when your employer has deducted TDS. Even if they haven't deducted TDS from your salary, you can still ask for a Form 16.
2. My TDS has not been deducted from my salary this month. Is it okay?
Any employer is required to deduct TDS before making payment. The Income Tax Act states that every person who deducts TDS from a salary or payment must produce a certificate with all the details of the TDS deducted & deposited.
3. If I did not receive my Form 16, does it mean that I don't have to file my income tax?
While the responsibility of deducting tax on salaries and providing Form 16 is on your employer, filing your income tax return is your responsibility. If your income from all sources combined exceeds the minimum tax slab, you have to pay tax, irrespective of whether your employer has deducted TDS or not. Even if your employer fails to issue you a Form 16, you have to file an income tax return and pay the due taxes.
Form 16 is necessary for you to file your income tax returns and be a responsible citizen. Fortunately, there are several easy tools online to help you file your taxes. The income tax filing tool from mymoneykarma is one such tool that makes tax-filing easy and hassle-free. You can utilize the tool to save your time and efforts.
This article is purely educational and should not be considered as tax advice. mymoneykarma does not provide tax advice. For tax counsel, please reach out to a tax advisor.