Hola! It’s Time to File Your Returns HOPE YOUR FORM 16 IS IN PLACE

It’s that time of the year again when the tax man comes calling and it is time to file your annual tax returns. And for that you need a crucial document, namely the Form 16. Every year, we collect Form 16 from our employers and file our returns. But do we know why this is a very important document? Read on to know more…


FORM 16 contains all the information you would need to file your returns. It is a TDS
certificate issued by the employer. When an employer pays salary to the employee, he is supposed to deduct a portion of the salary and pay directly to the Income tax Department. This is called TDS or Tax Deducted at Source. Form 16 is the TDS certificate that an employer issues to you
when TDS is deducted by them. It is mandatory for the employer to issue this certificate where the details of tax deducted and deposited is certified.

Know More – Form 16
It has 2 parts – Part A and Part B.

Part A has the following details –
1. TAN (tax deduction & collection account number) of the employer
2. PAN (permanent account number) details of both the employer and employee
3. The name and address of employer and employee
4. The assessment year and the period spent by you with the employer
5. For financial year 2018-19 the assessment year is 2019-20
6. Summary of tax deducted from your income and deposited to the government as per the quarterly TDS return filed by the employer
7. A monthly detail of TDS deducted and deposited

Part has the following details –
1. A consolidated detail of salary paid to you during the year
2. The breakup of your salary as well as detail of deduction claimed
by you under section 80 of the income tax act
3. Detailed breakup of exempted allowances under section 10
4. Deductions allowed under the income tax act (under chapter VIA)
5. Deductions under Chapter VIA include details of amounts claimed under Section 80C for EPF, PPF, NSC, life insurance premium or Section 80D for health insurance, Section 80G for donations made
6. It shows your total taxable income and tax deducted on such income

Deductions – Specific fields for deductions are mentioned below
1. Deduction for life insurance premium paid, contribution to PPF etc., under section 80C
2. Deduction for contribution to pension funds under section 80CCC
3. Deduction for employee’s contribution to pension scheme under section 80CCD(1)
4. Deduction for taxpayer’s self contribution to notified pension scheme under section 80CCD(1B)
5. Deduction for employer’s contribution to pension scheme under section 80CCD(2)
6. Deduction for health insurance premium paid under section 80D
7. Deduction for interest paid on loan taken for higher education under section 80E
8. Deduction for donations made under section 80G
9. Deduction for interest income on savings account under section 80TTA
Every employer is supposed to issue this certificate to their employees provided TDS has been deducted, which would clearly specify that the tax has been paid to the government. Non issuance of this certificate may call for the employer to pay penalty. In case you have more than one employer through the year then each of your employers will provide you a Form 16.

While it is the responsibility of the employer to issue you Form 16, it is your responsibility to pay tax and file returns if your income is above your taxable limits. If you have worked with different employers through the year make sure you add income from all of them irrespective of the fact whether they issued you a Form 16 or not.

FORM 16 -A
Form 16-A is also a TDS certificate but it is for TDS on Income other than salary. For example when bank deducts TDS on your income from Fixed Deposits then Form 16-A is issued. Also for other incomes like TDS deducted on insurance commission, rent receipts or any other income where TDS is deducted Form 16-A is issued.

All details on Form 16A are also available on Form 26AS. You can use Form 26AS to file your returns which is not possible with Form 16 as the details of Form 16 in 26AS are only the TDS deducted by the employer.

The basic difference between Form 16 and Form 26AS is that Form 26AS contains details of tax deducted at source

(TDS) for all the heads of income while Form 16 contains details of tax deducted at source (TDS) for the income from salary only. Form 26AS is provided on the Department’s site based on data submitted by all the Deductors while Form 16 is provided by your employer.

Both the documents are important because they contain all the details about income and hence become an essential document for ITR filing.
TDS deductions made available in form 16 and the 16A can be cross- verified using the actual in the 26AS Form. The amount in the forms 16 and 16 A should match up with the actual deposited account with the government furnished in the 26AS form.
Now whether you receive Form 16 or not the onus is on you to pay tax on your income and file your returns. If you don’t have Form 16 then check your payslips, bank statements, investments, loans and Form 26AS to file your returns. Form 26AS contains the details of all your tax deducted and tax paid. The Form 26 AS can be viewed / downloaded from the Income Tax Department’s online portal – www.incometaxindiaefiling.gov.in

Form 16 is a base document issued by your employer and is not the final document or return. You must check whether all exemptions that you are entitled to have been added in the Form 16. Sometimes if you have worked with many employers there could be chances of wrong calculation. Calculate on your own and take
the exemptions while filing your returns. Even if your Form 16 is without any deductions you can still claim the deduction while filing your returns. So make sure all your data are correct.
Expert Views
Our expert for this story FCA BINITA SENGUPTA, Practising Chartered Accountant with 19 years of experience in the field and Partner in a firm having offices at Noida, Greater Noida & Varanasi explains about the new format for Form 16.
Form 16 or a Salary Certificate is a document or certificate, issued as per the Section 203 of the Income-Tax Act 1961 to a salaried individual in India by their respective employers on or before 15th June of next year. Form 16 is one of the most important document for income tax purpose for every salaried employee. This contains all details of Salary received and Tax deducted by the employer during the financial year. This tax needs to be deposited with the Government and the TDS return must be filed by the employer in order to reflect the same in the Form 16 as well as the Form 26AS of the employee.
The CBDT (Central Board of Direct Taxes) has recently notified a new format for Form 16 in order to remove some ambiguities in the old format of Form 16. During the last several years, many fraud cases have come to light regarding large income tax refunds claimed by many individuals. Now the revised format has the following features:
– The employer will have to specify the nature as well as amount of allowances which are exempt from tax. Similar details have also been asked for in this year’s income tax form ITR-1. The revised format provides a list of allowances such as Travel concession or assistance under section 10(5), house rent allowance under section 10(13A) and so on that are exempt under the Income Tax Act.
– In the new Form 24Q, it is mandatory to furnish the PAN of the lender in case any deduction has been claimed in respect of housing loan taken from a person other than a Financial Institution or the Employer. Earlier, it was optional.
– The new format will allow the tax department to view a detailed break-up of the income and tax breaks claimed by a salaried person.
– The new format requires the break-up of all the tax-related deductions under section 80C to 80U claimed from salary. The earlier Form-16 format specified the consolidated total amount of deductions that have been claimed as per chapter VI-A of the Income Tax Act by the employee from employer.
– If an employee has received salary from his ex-employer or other employer during the previous year and same has been reported to the current employer for TDS purposes, then separate reporting is required for such salary income in new Form 16.
Details required from Form 16 while filing your return
1. Allowances exempt under section 10
2. Breakup of deductions under Section 16
3. Taxable Salary
4. Income (or admissible loss) from house property reported by employee offered for TDS
5. Income under the head Other Sources offered for TDS
6. Breakup of Section 80C Deductions
7. Aggregate of Section 80C Deductions (Gross & Deductible Amount)
8. Tax Payable or Refund Due