As the deadline for filing tax return approaches, it is crucial that you are on the top of the things. It would not only help you with a smooth flowing tax filing season but also prevent from making mistakes that could have been avoided.
Once you break it down, the tax filing process isn’t all that complicated. A string of small actions that need to be carried out carefully. Here are the three major activities associated with tax filing.
- File your tax returns
- Verify your tax returns
- The income tax department starts processing your returns
If you carry out the first two steps without any issues, the third step would follow hassle-free. If you are a salaried individual, to file your taxes you would need Form 16. And you need to know how to read Form 16. Or at least understand at a very high level what it contains and what information is important from return filing point of view.
In simple words, Form 16 is a certificate that your employer would issue to you at the end of a fiscal year. The next obvious question might be, is it mandatory to issue Form 16? Form 16 comes into the picture if an employer deducts taxes at source.
In such instances, they are bound to provide you with Form 16. It contains all the details regarding salary and taxes deducted at source by your employer. While there is no hard and fast rule to understand Form 16, being aware of the various sections of Form 16 will aid you in the tax return filing process.
For salaried individuals, Form 16 makes income tax returns a walk in the park. You can file ITR using Form 16. Wondering how? Well, you just need to upload your Form 16 to myITreturns and our system will do the rest for you. You just need to review the information uploaded, post which you can submit your tax return.
What is Form 16?
Form 16 is a salary certificate given by the employer of assessee to the assessee containing the computation of his income and TDS details. Form 16 certifies that TDS has been deducted on salary of the assessee by the employer. As per the income tax rules if an employer deducts TDS on salary, he must issue , Form 16 to his employee on or before 31st May of the next year immediately following the financial year in which tax is deducted.
Reading of Form 16
Reading of form 16 is important for preparing and filing income tax return. Form 16 consists of two parts viz Part A and Part B. Part A contains information in relation TDS deducted and deposited by employer. Part A of form 16 is generated and downloaded from the website of traces and it bears the logo traces at the background of Part A as a proof it is downloaded from traces. Part B contains information relating to computation of salary and other income and calculation of income tax liability. Part B of form 16 is prepared by employer by entering the details of salary and other income with deduction under chapter VI-A from data available with him and issues the same along with Part A to the employee.
Part A of Form 16 includes below details -
- Unique TDS Certificate Number
- Name and address of the Employer
- Name and address of Employee
- PAN and TAN of Employer
- PAN and Reference Number of Employee
- Financial Year and Period of Employment
- Total TDS Deducted and Deposited for the year
Part B of Form 16 includes following -
- Detailed about Salary including bifurcation as Salary, Perquisites and Profits in lieu of Salary
- Details of Allowances exempt u/s 10
- Details about deduction u/s 16 including Standard Deduction and Professional Tax
- Any other income reported by the employee
- Deductions available against Income
- Your Net Tax Liability
- Verification of the employer
In case you do not have your Form 16, you may refer our guide for how to prepare return without Form 16.
If you have more than one form16 to enter in your Income-tax return, read our guide for Uploading multiple form-16.
Being aware of the various heads of Form 16 ensures that you do not miss out on any part. If you feel that Form 16 doesn’t contain all the information, you can update any additional information while reviewing the income tax return filing process.
Form 16 Part A contains all the demographic details of a taxpayer, such as the TDS certificate number, the name and address of employee as well as the employer, TAN and PAN of the employer, the financial year in question and so on.
Form 16 Part B, on the other hand, contains details of salary, taxes deducted, additional income, total tax liability, verification provided by your employer and so on. Together they provide a consolidated view on your finances for a fiscal year.
If you have any other sources of income, you can generate your own Traces Form 16. You just need to login to the website, request for Form 16A, download the Zip file, unlock the text file from the Zip folder and use the generate Form 16A option on the website.
The presence of Form 16 makes the entire tax filing and return filing process a much simpler affair. Unlike tax filing in the past, you just need to upload the form to myITreturns and the rest is well taken care of. After uploading the file, you just need to verify if all the details are accurate.
Once you are convinced with the details, you can submit the return. And the income tax department will send an acknowledgment of the same after they have received the tax return.
- Where can I get Form 16 from?
If you are a salaried individual, it is your employer’s responsibility to provide you with a Form 16, if they have been deducting taxes from the source.
- Is it mandatory for an employer to provide Form 16?
As mentioned above, the Form 16 would come into the picture if your employer has deducted TDS. If no TDS was deducted, your employer is not mandated to provide you with a Form 16.
- Can I file my return without Form 16?
Yes. Though the presence of Form 16 makes the tax return filing process way easier, you can still file your returns without Form 16.
- If I don’t receive a Form 16, does that mean I don’t have to pay taxes?
Though, your employer must provide you with a Form 16 if TDS is collected, paying taxes if completely your responsibility. If you earn more than the threshold of INR 2,50,000 you are eligible to pay taxes. You must check your tax liability and pay them accordingly.