When it comes to online filing of income tax, it becomes necessary to ensure that Form 16 is maintained with the assessee for simplifying the return filing procedure. Form 16 is also known as Salary TDS Certificate. So what is Form 16? The TDS certificates are of two types which are mentioned below.
- Form No.16. For salaries (Salary TDS Certificate)
- Form No.16A. For all other payments (TDS Certificate)
Here we will discuss about Form 16 of Income Tax (Salary TDS Certificate).
What is Form 16 of Income Tax?
Form 16 is the document proof given by an employer to all its employees with the complete details of income (salary), the amount deducted as income tax (TDS) for each month and the total tax payment with deposit date to government and return submission details. Earlier, we showed in detail the complete guide why tax is deducted at source and its meaning .This document can be used by employee as salary proof and it helps them to submit the income tax returns to the government with all correct details. After digitization there is no need to submit the form 16, it is only proof for employee’s income and the tax payment. It is safe to keep all your form 16, if there is any issue in the income tax returns; it can help employee to prove his salary and TDS deduction on that.
Main Features of Form 16
- Form 16 contains all the details of income and the tax deducted. Tax will be shown on monthly basis and the detail of quarterly return is also part of form 16.
- There is no compulsion to issue form 16 to the employees if TDS amount in that year is zero. Know more about TDS on Contracts .
- If the company doesn’t have the TAN then it can’t deduct the TDS because it means it is not registered and authorized to deduct TDS. In that case, they will not provide the form 16 because when it is not authorize to deduct TDS then how it can issue TDS certificate.
- It is responsibility of employer to issue form 16 to his employees if the employer has deducted tax on employee’s salary during the year.
- As stated above Form 16A is different from form 16. Form 16a is issued for the TDS other than salary income i.e. contractor, commission agent, interest etc. these are covered in section 194 whereas TDS on salary is governed by section 192 of income tax act 1961.
- If the information in the form 16 is wrong, employee can complain it to employer and if there is a mistake then employer can revise the return. Do you know the penalty on non payment of TDS .
Time-Limit for Issue of Form No 16 of Income Tax Act
The TDS certificate in form 16 shall be issued annually by 31st Day of May of the financial year next following the financial year in which the income was paid and tax deducted. Presently there are two parts of form 16 of Income Tax Act first part is generated by employer and second is generated by income tax website. By this you can check the amount of TDS deposited in your PAN and TDS deducted by employer. Both must be same otherwise employer need to revise the return.
Detail mentioned in Form 16 of Income Tax
As mentioned above form 16
is in two parts. One is form A and other is part B. Here we will study both parts to know them better
Contents of Form 16 – Part A
Part A of your Form 16 will be the issued by the employer it is manually generated by the employer. Previously it was the only part of the form 16 but now Part B is also compulsory. Part A determines the total amount paid to employee during the year and amount of tax deducted and deposited by the employer in employee PAN. This certificate comprises these following details:
– Certificate number
– Employee’s and employer’s name and address
– Employee’s and employer’s PAN. Know about importance of PAN
– Tax Deduction Number (‘TAN’) of employer
– Range of Commissioner of Income Tax (TDS)
– Period for which the certificate belongs to (for example April 1, 2013 to March 31, 2014)
– Quarter wise details of salary paid to employee, receipt numbers of the quarterly TDS returns, TDS amount deducted and deposited under employee’s PAN.
– BSR code of the bank branch, date on which TDS was deposited, Challan serial number relating to each amount of tax deposited by employer
– All the pages of Part A of Form 16 should have been manually signed by the employer or its representative.
Contents of Form 16 – Part B
Part B of Form 16 is generated from income tax website. It has the detail which is available with income tax department. It reflects detailed salary components, taxability of the same and the total amount of tax payable for the year against which TDS has been deducted and deposited by the employer. Part B has following details:
– Gross Salary
– Exempted allowances under Section 10 of the Income Tax Act – conveyance allowance, house rent allowance, medical allowance, children education and hostel expenditure allowance, etc
– Deductions allowable from the salary income – entertainment allowance and professional tax
– Total income chargeable under the head ‘Salaries’ based on the above figures
– Any other taxable income. This is based on data which was provided by employee to his employer.
– Tax on total income payable– This should be equal or less than TDS deducted by the employer. If it is more than TDS then it is employer’s liability and he will pay interest on that. Short amount of TDS can be deposited by employee as self assessed tax while furnishing return. If TDS is more deducted then employee can claim that in his income tax return.
What can an employee do if employer is not giving form 16?
The employer has time-limit to issue form 16/ TDS certificate which is 31 st May of next financial year. But when employer is not issuing TDS certificate to employees then it can be assumed that the employer has deducted TDS from salary of employees and hasn’t deposited with income tax department. Whenever this is happened then an employee must firstly check Form 26 AS from income tax website. This has all detail of TDS/Advance tax which is deposited in your PAN. If the form 26AS is blank about your TDS deduction, then employee can demand the same from the employer and if employer is not giving it to employee then employee can complain it in income tax department. Employee must go to Assessing officer who has jurisdiction of his employer.