What is Income Tax Form 16: Everything Explained

Income Tax Form 16 is the tax deduction at source certificate issued by the employer in the employee’s stead. It provides details of TCS/TDS for several transactions between deductors and deductees.

If you have switched jobs or worked with multiple employers in a financial year, your tax is likely to get deducted at multiple places. In that case, you will have to get an ITR Form 16 from them individually.

People searching for “what is form 16?” Firstly, one needs to understand why it is so important.

Why Do You Need ITR Form 16?

Income Tax Form 16 acts as proof of timely tax payments. Therefore, as a taxpayer, you can file your Income Tax Returns easily with this certificate.

ITR Form 16 also contains information on how your tax was calculated depending on the investment declarations made at the beginning of that financial year. These declarations include company allowances, house rent, loans, medical bills, etc., that help you file your Income Tax returns.

However, considering your overall net income in a financial year, your employer may or may not deduct any tax from your salary. So, before taking the necessary steps, you first need to know if you are eligible for ITR Form 16.

Eligibility for Salaried Persons Under ITR Form 16

If you are a salaried person and your employer has deducted tax at source from your salary, you are eligible for Income Tax Form 16.

Your net annual income may fall above or under the tax exemption limit. But if your employer has made the tax deductions, he/she needs to issue an ITR Form 16.

In addition, your employer needs to issue ITR Form 16 on or before 31 May of the assessment year to give you ample time to file your ITR before the due date.

How to Download Form 16?

You can download Income Tax Form 16 in these simple steps.

Go to the official website of the Income Tax Department.
Next, go to ‘Forms/Download’ and click on ‘Income Tax Forms’.
Here, you will find both the ‘PDF’ and ‘Fillable Form’ options.
Click on ‘PDF’ if you want to download it.

If you want to fill it online, you can opt for any PDF editor available on the Internet.

Understanding Income Tax Form 16

This form applies to both salaried employees and pensioners. It contains two parts - Part A and Part B.

Part A consists of information regarding TDS deducted and deposited by the employer. It includes -

TDS certificate number
Name and address of the employer
Name and address of the taxpayer
PAN and TAN of employer
PAN and Reference Number of taxpayer
Financial year and period of employment
Total TDS deducted and deposited for the year, as certified by an employer

On the other hand, Part B of ITR Form 16 includes -

Details about salary
Information on exempted allowances, according to Section 10
Details about deductions allowed as per Chapter VIA of the ITA
Reliefs under the Section 89
Any other income reported by the employee
Deductions available against that income
Your net tax liability
Verification of employer

How to Do Income Tax Form 16 Verification?

After downloading and filling up ITR Form 16, you can verify it in these simple steps.

Go to the official portal of TRACES.
Click on ‘Proceed’ after entering the Captcha code.
Fill in all the required details and click on ‘Validate’.

What Are the Benefits of Having ITR Form 16?

Besides the primary use of Form 16 as your ‘salary statement’, you can also use this certificate in several other scenarios.

Proof of your income
Checking all your tax-saving investments
Filing Income Tax return
Loan assessment and approval
Documentation of your tax deductions
Visa issuance
Checking overpaid taxes
Helping the next employer compute your tax liabilities

What Is ITR Form 16 Tax Exemption?

The annual Form 16 eligibility salary is ₹2,50,000. So, if your annual income for the assessment year is within ₹2,50,000, you are exempted from filing ITR Form 16.

How to File ITR With Form 16?

If you are a taxpayer and want to save on taxes, you must file your tax returns mandatorily.

Online Process

You can visit the IT department’s e-filing portal to file your tax returns online.

After filling the tax return form, you need to fill in the income details with the required documents. The system will automatically compute your tax liability, or you can do it yourself.
In the next tab, you will find the tax details. You can verify the bank details and declarations shown here.
Next, check and upload the file. The ITR-V will be automatically sent to the provided email ID.

After successful submission, a link to e-verify the details will be displayed. Check it carefully and save it for future references.

Offline Process

After downloading and filling in the necessary forms, submit them at your nearest ‘Aaykar Sampark Kendra’. You also need to fill in an acknowledgement form, which will be stamped and returned by the accessing officer.

How to File ITR Without Form 16?

In case your employer fails to issue an ITR Form 16 after having deducted TDS, the employer will have to pay ₹100 for every day the default continues.

That being said, here are the steps to file ITR without Form 16 -

Firstly, determine the total income from all your sources.
Then, find TDS deducted on income with the help of Form 26AS from the TRACES website.
Claim Deductions through investment declarations.
After that, calculate your total taxable income and tax liability for the year. Next, file your IT return accordingly.

Now that you know the detailed process of getting Income Tax Form 16 and its benefits, ask your employer for the same. You can also download it yourself, as mentioned, to save extra tax payment.

Frequently Asked Questions

All

Will there be no tax return without Form 16?

It is recommended that you file your IT return with Form 16. However, you can also do the same without the form.

Is it mandatory to attach Form 16 while filing income tax?

No, as per the IT Department, it is not mandatory to attach Form 16 while filling out your income tax. However, you can attach a photocopy of the same in your own interest.