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ITR Form 16 | What is Form 16 | YES BANK

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If you are a salaried employee, you must understand the importance of income tax Form 16 when filing your (IRT) income tax returns. If you have a complete Form 16, filing your ITR would be a simple task. Even though it is not mandatory to know what your Form 16 includes, it is advisable to be informed about such critical tax-filing forms.

What is Form 16?

Form 16 is like a salary certificate, including details of your income and the Tax Deducted at Source (TDS) in a financial year. Form 16 also serves as legal proof of TDS cuts made on your salary and submitted against your Permanent Account N​umber (PAN).

Why is Form 16 issued?

The Income Tax Act, 1961 states that every employer must deduct a specific sum from the salary of an employee if it exceeds the basic exemption limit of ₹2.5 lakhs. The amount deducted will be paid to the government against your PAN. However, if your income is below the taxable limit, no TDS cut is made, and you might not get a Form 16.

Who issues Form 16?

Under Section 203 of the Income Tax Act, Form 16 is provided by your employer upon deduction of tax from the salary. In case you switched your job in a particular year, you will receive two Form 16s. Currently, the deadline to issue income tax Form 16 is June 15 of every year. In case an employer delays or fails to give Form 16 by the set date, a penalty of Rs 100 per day is charged until the default lasts. But the penalty cannot exceed the total tax deducted.

What does Form 16 include?

Form 16 online has two divisions – Part A and Part B. Part A comprises TDS cuts made on your salary, whereas Part B holds details about the computation of taxable income and the total taxes pending or refundable. Moreover, Part B also has a complete break-up of the salary paid to you in a financial year.

Components of Part A of Form 16 online are:

  • Complete name and address of the employer

  • Complete name and address of the employee

  • PAN and Tax Deduction and Collection Account Number (TAN) of the employer

  • PAN of the employee

  • Total summary of tax deducted and deposited quarterly by the employer

  • Assessment year

  • Period of employment with the employer

  • Unique TDS Certificate Number

Part A can be generated through the TRACES portal.

Components of Part B of Form 16 are:

  • An exhaustive break-up of salary

  • Allowances under Section 10

  • Deductions under Section 16

  • Other income from house property

  • Any other income reported by the employee

  • Tax deductions permitted under Chapter VI-A of the Income Tax Act

  • Any rebate under Section 87A, if applicable

  • Surcharge, Health and Education cess, if any

  • Any relief offered under Section 89

  • Net tax payable

Part B is prepared manually by the employer.

What to do if you have worked with more than one employer?

If you have worked with more than one employer in a particular year, each will provide a Form 16 for the tenure of your employment. However, Part B can be given by both employers or by the last employer, depending on your choice.

Filing tax with multiple Form 16 can be slightly complicated. However, to avoid this, you can inform your current employer about the previous service. Also, submit Form 12B to the new employer, with details like Basic Salary, HRA, LTA, perks and other tax deductions granted.

If you submit Form 12B in your new company, you will get a consolidated income tax Form 16. This will, in turn, reduce difficulties during tax filing.

You can also visit YES BANK's website to know more about their Savings Account and Fixed Deposit Accounts

 

 

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