Form 16 is a salary certificate or document issued to salaried persons in India by their respective employers under Section 203 of the Income-tax Act, 1961. It contains the full details of the salary paid by the company or employer to the employee in a particular financial year and the income tax deducted from the salary of the person to be paid by the payer. For download, Form 16 is below-given link
https://www.incometaxindia.gov.in/forms/income-taxrules/103120000000007849.pdf
OR
https://www.incometaxindia.gov.in/Pages/tax-services/form-16A-download-eductor.aspx
According to the Income Tax Act, each employer deducts TDS at the time of payment of the mandatory salary, which is calculated on the basis of the income tax slab rate for the financial year. Companies usually calculate the tax payable by the employee on the basis of the forecast income and investment declaration shared by the employee at the beginning of the financial year.
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Elements of Form 16
Form 16 is one of the most important tax reforms for salaried individuals. It contains all the information Form 16 is one of the most important tax reforms for a salaried person.
Form 16 is in the two parts include:
Form 16 Part – A
Part A provides a summary of the taxes paid by the company or employer on behalf of the employee and on the government account from salary income. This is a certificate that is duly signed by the employer that they have deducted TDS.
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Part 16 of Form 16 consists of the following details:
Employee's Salary information, such as individual and employer name, address details, PAN details of both the employer and the employee. For an employer, it is also important to provide details as this will help the income tax department to track the flow of money from the employer or employee's account. If a company does not have TAN, they are not entitled to deduct TDS. In this condition, the deductor can not provide Form 16.
The summary of paid salaries
Date of tax deduction from salary
The date of submission of tax to the government account
Quarterly tax deduction and submission to the Income Tax Department
DS TDS payment acceptance number
This section has been created and downloaded through the trace portal of the Income Tax Department. It also provides details like payment operations, invoice numbers etc. through the bank's BSR code for future reference.
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Form 16- B
It is a consolidated statement that relates to any other income disclosed by the employee to his organization or any other income disclosed to the organization, including the amount of tax payable and the amount of tax payable. It provides information on employee earnings deduction in the prescribed format and a wide range of applicable discounts and discounts. The names and descriptions of the employees as PAN have even been mentioned in Section B
The following information is provided in the form below:
Total Salary Received: The salary structure is further divided into different sections such as house rent allowance, leave travel allowance, leave encashment, gratuity and others.
Approved Exemption: Employees' allowances for accommodation (HRA), transportation, children's education, and dormitory expenses, medical expenses, etc., as per Sec (10) of the Income-tax Act, 1911 are also part of the form.
Total income: The amount of salary income received from the employer and any other income declared by the employee such as income from house/property etc. Information related to other income needs to be shared with the employer by the employee.
Exemption from Salary: Section 80C / 80CC / 80CCD includes contributions made for schemes or instruments like Public Provident Fund, Life Insurance Policy, Tax Affordable Mutual Fund, Pension, Sukanya Samridhi.
Net Taxable Salary: Total discounts are consolidated under "Chapter IV" and are deducted from the total income to calculate taxable income. This amount of your tax liability is calculated.
• Tuition fees and surcharges if any
Applicable Rebate under paragraph 87, applicable
Relief under Section 89, if any
The tax payable income
• Tax deduction and balance tax applicable or refundable
You may also, like- Download & Prepare at a time 100 Employees Form 16 Part A&B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC
What are the eligibility criteria for Form 16?
As per the rules of the Ministry of Finance, Government of India, every salaried person under taxable bond is eligible for Form 16. If the employee does not fall within the set of tax brackets, he or she will not need a tax deduction (TDS). Therefore, in this case, there is no obligation to provide Form 16 to the employee of the company.
The importance of Form 16 for a salaried person
Form 16 is very important from 16 income tax perspective. The details mentioned in the form are required for filing the income tax return. It helps the taxpayer to easily calculate income tax returns in India without the help of chartered accountants or financial planners. This is even more applicable to those who have a source of income, the salary received from their organization.
It was not only proof of TDS, it was also considered an important document in tax compliance. This is a document required by an employee to provide proof of duty paid. Banks, other donors and financial institutions consider the TDS certificate as valid evidence. To apply for a loan, many financial institutions ask for this document as part of their verification process.
