About Form 16 

Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source from income chargeable under the head “Salaries”. Form 16 is a certificate or a document that is issued to salaried personnel in India by their respective employers. The certificate carries necessary details that assist in the process of filing Tax Returns with the Income Tax Department of India.

Form 16 is a document that is used by salaried personnel as part of the process of filing Income Tax Returns in India. The Income Tax Act of 1961 and the Income Tax Rules of 1962 are the governing laws of the Income Tax Department of India. The Form 16 is an important document that is in accordance with the rules and regulations laid down by the Income Tax Department as well as the Government of India.

The Form 16 is provided by an Employer to the Employee and is used by the employee as reference as well as proof while filing Income Tax Returns. The Form furnishes various details such as Salary Income components of the Employee, Tax Deducted at Source (TDS) by the Employer, and Tax paid by the Employer to the Income Tax Department.

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Features and Important Components of Form 16

Features of Form 16

The following features make Form 16 an important part of the entire process of filing Income Tax Returns in India. The Form is especially important to Employees working in a company or firm.

• It is applicable to Salaried personnel
• It is a Tax Deduction at Source (TDS) Certificate issued by the Employer
• It acts as proof that the Employer has deducted TDS while paying the Employee
• It is proof of the Salary that the Employee receives
• It reflects the amount of Income Tax paid by the Employer on behalf of the Employee
• It can be used by the Employee as proof of his Income if the Income Tax Department wishes to scrutinize the Income Tax Returns in detail
• Only an Employer with a TAN (Tax Deduction Account Number) is eligible to deduct TDS, and therefore issue a Form 16
• If TDS is not deducted the Employer is not under obligation to issue a Form 16 to the Employee
• If TDS is deducted, the responsibility to issue the Form 16 to the Employee lies with the Employer
• Information given on a Form 16 can be corrected.

Important Components of Form 16

Following are few key components that are found in a Form 16

• Personal details of the Employee including Name, Permanent Account Number (PAN) etc.
• Employer details including Name, permanent account number PAN, TAN etc.
• Acknowledgement Number of the Income Tax Payment made by the Employer
• Details of Salary including Gross Salary, Net Salary, Perquisites, Deductions etc.
• Total Income and Total Tax deducted
• Details of Education Cess or Surcharge etc.
• Tax deducted as per Section 192 (1A)
• Receipt Number of the TDS Payment
• Balance Tax Payable by the Employee or Refundable to the Employee
• Details of Tax Payment including Cheque Number, DD Number, Voucher Number, Challan Number etc.
• Declaration of Tax Payment by the Employer