What is Form 16 – Basics, Part A & Part B of Form 16, FAQs

Updated on

New changes in Form 16 - Part B has been notified by the income tax department. We have updated the below article as per the changes applicable to Form 16-Part B since FY 2018-19. Read here to know more.

Also, Click here to know more about Union Budget 2021.

1.What is Form 16?- Basics

Form 16 is essentially a certificate employers issue to their employees. It provides a validation that TDS has been deducted and deposited with the government authorities on behalf of the employee. It gives a detailed summary of the salary paid to the employee and the TDS deducted.

Form 16 contains the information you need to prepare and file your income tax return. Employers must issue it every year on or before 15 June of the next year, immediately after the financial year in which the tax is deducted. Form 16 has two components – Part A and Part B.In case you lose your Form 16, you can request for a duplicate from your employer.

what is form 16

2. Part A of Form 16

Part A of form 16 provide details of the quarterly TDS deducted and deposited, details of PAN, TAN of the employer along with other information.An employer can generate and download this part of Form 16 through the TRACES (https://www.tdscpc.gov.in/app/login.xhtml) portal. Prior to issuing the certificate, the employer should authenticate its contents. It is important to note that if you change your job in one financial year, every employer will issue a separate Part A of Form 16, for the period of employment.Some of the components of Part A are:
  • Name and address of the employer
  • TAN and PAN of employer
  • PAN of the employee
  • Summary of tax deducted and deposited quarterly, which is certified by the employer.
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    3. Part B of Form 16

    Part B of Form 16 is an annexure to Part A. Part B is to be prepared by the employer for its employees and contain details of breakup of salary, deductions approved under Chapter VI A. If you change your job in one financial year, you should take Form 16 from both the employers. Some of the components of Part B notified newly are:

    a. Detailed breakup of salary

    b. Detailed breakup of exempted allowances under Section 10

    Form 16 - Part B

    c. Deductions allowed under the Income Tax Act (under chapter VIA):

    List of deductions mentioned are as 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
  • Form 16 - Chapter VIA

    d. Relief under Section 89

    4. Details required from Form 16 while filing your return

    With reference to the image below, here is where you will be able to locate certain information for filing your income tax return for FY 2019-20(AY 2020-21).

    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 dueRefund Due

    Form 16-part B Form 16-part B

    Form 16- Part B

    Additional information, which you will require from your Form 16 while filing your annual return are:

    a. TDS Deducted by Employer

    b. TAN of Employer

    c. PAN of Employer

    d. Name and Address of Employer

    e. Current Assessment Year

    f. Your (Taxpayer’s) Name and Address

    g. Your PAN

    5. What is eligibility criteria for form 16?

    According to the regulations issued by the Finance Ministry of the Indian Government, every salaried individual who falls under the taxable bracket is eligible for the Form 16. If an employee does not fall within the tax brackets set, he/she will not need to have Tax Deducted at Source (TDS). Hence, in these cases, the company is not under an obligation to provide the Form 16 to the employee. However, these days, as a good work practice, many organizations, even in these cases, issue this certificate to the employee as it contains a consolidated picture of the earnings of the individual and has other additional uses as well.

    6. Points to be noted while checking form 16.

    Once an individual receives the Form 16 from the employer, it is his/her responsibility to ensure that all the details mentioned therein are correct. In addition to verifying the personal particulars and details of amount of income and TDS deducted, the most important thing one needs to confirm in Form 16 is the PAN number. If it is mentioned inaccurately, one should immediately reach out to the HR /Payroll/ Finance Department of the organization and get the same corrected. The employee will be issued a rectified and updated Form 16 by his/her employer. Besides this, the employer would also need to make a correction from their end by filing revised return of tax, to credit the TDS proceeds to the correct PAN.

    5. Frequently Asked Questions

     
    • How to get Form 16?
      You can get your Form 16 from your employer. Even if you have left your job, your employer will provide you the Form 16. Unfortunately, this income tax form 16, cannot be downloaded from anywhere. .
    • I don’t have Form 16 how do I file my return?
      Though this is one of the most important income tax forms, don’t worry if you do not have it. You can still file your income tax return. Click here to learn more.
    • If there is no TDS is the employer required to issue a Form 16?
      TDS certificate in Form 16 is issued when TDS has been deducted. In case no TDS has been deducted by the employer, he may not give you a Form 16. Take a look at our Guide on how to e-file without form 16
    • When the employer deducts TDS and does not issue a certificate?
      Any person responsible for paying salaries is required to deduct TDS before making payment. The Income Tax Act lays down that every person who deducts TDS from a payment, must furnish a certificate with details of TDS deducted & deposited. An employer in specific is compulsorily required to furnish a certificate, in the format of Form 16. Read More
    • If no Form 16 has been issued to me does it mean I don’t have to pay tax or file a return?
      While the onus of deducting tax on salaries and providing Form 16 is on the employer, the onus of paying income tax and filing income tax return is on you. If your income from all sources is above the minimum tax slab you are required to pay tax, whether or not your employer deducted TDS. Even when he fails to issue you a Form 16, you must file an income tax return and pay off the taxes that are due.
     

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