Form 16 for Income Tax filling with example

What is Form 16?

Form 16 is an Income Tax form used by companies to provide their salaried individuals in India. This form carries all the required details that help the employee in filing their tax returns with the Income Tax department in India. The Income Tax Act of 1961 and the Income Tax rules of 1962 are the laws that are prevailing in India. When a Form 16 is provided to an employee by their employer it’s a source of proof of filing their Income Tax Returns, the form has various components such as Salary Income components of the employee. Every employer should provide their employees with the Form 16 who fall under the tax brackets set up the Finance Ministry of the Government of India. If an employee doesn’t fall under the tax brackets set, then he/she doesn’t receive the Form 16 as he/she will not need to pay taxes neither will they need to have Tax Deducted at source or TDS.

These components are:

  • The personal details of the employee, like name, Permanent Account Number (PAN) etc.
  • The employer details, name, PAN, Tax deduction and collection Account Number (TAN), etc.
  • An acknowledgement number of the taxes paid by the employer.
  • Details of the salary; Gross salary, net salary, deductions, perks etc.
  • Total income and tax deductions.
  • Education cess and surcharge details.
  • Taxes deducted as per sections 191A.
  • Declaration of tax payments from the employer.
  • Refunds in any to the employee, or balance of taxes payable by the employee.
  • Receipt of the TDS paid.
  • All details of the Tax Payment, like Challan number, cheque number, Demand Draft number etc.

The Form 16 has 2 parts, Part A and Part B:

The Part A of the Form 16 contains the TAN of the employer and PAN of the employer and the employee. The addresses of both the employee and employer. This will contains all details of the pay-outs from the employer and employee during the current financial assessment year. This part of the Form 16 also contains the TDS filed by the employer, the taxes deducted from your income and paid to the government every quarter. This also contains a monthly statement of the same.
The Part A of the Form must include:
  • TDS deducted by the employer.
  • PAN of the employer.
  • The current financial assessment year.
  • The employee PAN.
  • TAN of the employer.
  • The employee/tax payer's name, address etc.
  • Name and address of the employer.
The Part B of the Form 16 contains the consolidated details of the salaries paid to the employee during the financial assessment year. The salary must be broken down, with details of deductions made by the employee under section 80C. The deductions that can be made under this section is EPF, NSC, Life insurance premiums, PPF, etc. If in one financial assessment year employee has changed jobs then the employee needs to be provided Form 16 of both companies.
The Part B of the Form must include:
  • Taxable salary of the employee.
  • TDS by the employer.
  • Breakup of the deductions of sections 80C.
  • Aggregate of the section 80C with gross and deductible amount.
  • Tax refund or any payables due.

 Income Tax:

Income Tax is a type of direct tax that is imposed by the government on the annual income of an individual. At the end of every financial year, citizens of India are required to pay Income Tax to the government. The amount of tax they have to pay differs depending on the income tax slab that they fall under.

Income Tax Slabs :

New Income Tax Slab According to Budget 2017 – 2018:
Tax Slabs For Individuals and HUF (Age – Less than 60 years):
Income Tax Slab Tax rate
Up to Rs.2,50,000 NIL
Above Rs.2,50,000 and up to Rs.5,00,000 5%
Above Rs.5,00,000 and up to Rs.10,00,000 20%
Above Rs.10,00,000 30%
*10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.
*15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.
Tax Slabs For Individuals and HUF (Age – 60 years and more, but less than 80 years):
Income Tax Slab Tax rate
Up to Rs.3,00,000 NIL
Above Rs.3,00,000 and up to Rs.5,00,000 5%
Above Rs.5,00,000 and up to Rs.10,00,000 20%
Above Rs.10,00,000 30%
*10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.
*15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.
Tax Slabs For Super Senior Citizens (age - 80 years and more):
Income Tax Slab Tax rate
Up to Rs.5,00,000 NIL
Above Rs.5,00,000 and up to Rs.10,00,000 20%
Above Rs.10,00,000 30%
*10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.
*15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.
Income Tax Slab (2016 – 2017):
Tax Slabs For Individuals and HUF (Age – Less than 60 years):
Income Tax Slab Tax Rate
Up to Rs.2,50,000 NIL
Above Rs.2,50,000 and up to Rs.5,00,000 10%
Above Rs.5,00,000 and up to Rs.10,00,000 20%
Above Rs.10,00,000 30%
*12% surcharge is imposed in case the total income is above Rs.1 crore.
Tax Slabs For Senior Citizens (Age – 60 years and more, but less than 80 years):
Income Tax Slab Tax Rate
Up to Rs.3,00,000 NIL
Above Rs.3,00,000 and up to Rs.5,00,000 10%
Above Rs.5,00,000 and up to Rs.10,00,000 20%
Above Rs.10,00,000 30%
*12% surcharge is imposed in case the total income is above Rs.1 crore.
Tax Slabs For Super Senior Citizens (Age - 80 years and more):
Income Tax Slab
Up to Rs.5,00,000 NIL
Above Rs.5,00,000 and up to Rs.10,00,000 20%
Above Rs.10,00,000 30%
*12% surcharge is imposed in case the total income is above Rs.1 crore.

How to Fill the Form 16?

Filling out of the Form 16 as shown below:
The Part A of the form will be…

Form - 16 - Part A
  • Name and address of the Employer: Will be the employer details.
  • Name and designation of the Employee: Will be the employee details as per company records.
  • PAN of the deductor: Permanent Account Number of the Employer.
  • TAN of the deductor: Tax deduction and collection Account Number of the Employer.
  • PAN of the employee: employee’s Permanent Account Number.
  • CIT (TDS): This is the Income Tax Commissioner’s office details.
  • Assessment year and period: Is the current financial year and financial year beginning 1st April and ending 31st March.
  • Summary of the quarters mentioned the company.
The Part B of the form will be as below:

Form - 16 - Part B 
Under this section:
  • Gross salary will be your salary without any deductions plus any prerequisites that you receive.
  • Allowance that the company pays you, like travel allowance, house rent allowance etc.
  • The total income chargeable under salaries.
  • Gross total income will be the amount on which your taxes will be calculated.
Form - 16 - Part B - Page 2 
Under this section you will have all the investments made by you and would have received the tax benefits for the same.

How to Get the Form 16?

This document is generally issued by your employer, and is more commonly known as a salary certificate to the common man. This is issued for the present financial year and reflects the total earnings and total income taxes deducted for that financial year. For a salaried individual this document is very important to show his/her income tax returns. To get the Form 16, you could download the Form from the online website of the Income Tax Department. The form is available on their website in a PDF format and a fillable form as well.

When is Form 16 Required?

When you file your Income Tax returns for a year with the Income Tax department, and your employer also files the taxes on your behalf which are deducted at source (TDS), the Form 16 is required. Most banks and financial institutions use this document as a part of their verification process when you apply for a loan or any kind, be it a housing loan, consumer loan, vehicle loan, personal loan etc.

Can I Get Form 16 For Previous Years?
If you are looking for Form 16 for a particular year, then you should contact the employer who you worked for during that year and request for a copy of the form. If this process does not work, then you can open the e-filing website of the Income Tax Department of India and download form 26AS. This form has information about TDS, TAN and Salary.

Difference between Form 16 and Form 16A:
Form 16 and Form 16A are both TDS Certificates, but the difference is that Form 16 is only a Salary TDS Certificate while Form 16A can be used for TDS on any Income and not just salary. Form 16 is issued by the employer after deducting TDS on your salary and Form 16A is issued by the bank after deducting TDS on the income earned from interest.

Difference between Form 16 and Form 26AS:
Form 16 is a Salary TDS Certificate that is issued by the employer. Form 26AS has details about the tax that has been deducted and deposited with the government on your behalf by deductors (banks, employers, etc.). Form 26AS also contains details about Tax Credits. TDS amount mentioned in Form 16A and Form 16 can be cross-checking using Form 26AS.

Form 16 Benefits:
  • Form 16 has all details about the amount of TDS that has been deducted from your salary.
  • It acts as proof of income and the tax payment.
  • It can be submitted as proof of income/tax while applying for loan.
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