Importance Of Form 16 And 16 A

Written by Gagandeep Arora - Printed on - Date - 2nd June 2022

A form which validates the arrival of tax submission time for an employee. Form 16 is the proof of filing the return of the employer to the income tax authorities. It also curtails all the details regarding the tax deducted and submitted by them to the government. In simple words, the certificate depicts the amount earned by the employee and the amount that has been deducted at the source.

Eligibility for the Form 16

A salaried person whose tax has been deducted by the employer is eligible to get Form 16, it does not matter if your income falls under the tax exemption limit or not.

Components Of Form 16

The major parts of Form 16 are given below-

• Refunds or balance of taxes payable

• TAN, PAN details of the employer

• Details of tax payment

• Personal details of the employee

• Taxes deducted according to section 191A

• Salary details

• TDS receipt

The form is further divided into two parts

Form 16 helps you easily file your tax return. It is proof that the employer has paid the taxes. The form curtails all the details of tax computation based on investments made at the

beginning of the financial year. It also depicts all the allowances given by your employer that may affect your tax computation of the salary.

Difference between Form 16, 16A and 16B

All these forms are details of tax deducted at source but the difference is only in the person whosoever has issued the form.

Form 16- It is issued by the employer as proof of tax deducted by them on income from your salary taking into consideration investments and allowances given to you. Form 16 A-This certificate is not issued by the employer but by financial institutions or entities who have deducted tax at source on your income other than your salary. For example interest on your fixed deposits, income from rent or commissions etc. Form 16 B-This certificate is issued for tax deducted at the source for income earned through the sale of immovable property. The buyer must deduct 1% of the sale value as TDS and submit it to the income tax authorities.

Is it Possible To File an Income tax return without Form 16?

Yes, it is possible to file an Income tax return without Form 16 provided you know the details of Part A and Part B.

1- Details of your employer like name, address, PAN and TAN.

2- Examine the details of your salary statement like basic salary, allowances, other deductions and gross salary.

3- Collaborate on all the documents regarding investments which you would have submitted before.

Based on the above-said documents, it is possible to file your return.

If The Employer Has Deducted TDS But Has Not Issued Form 16?

An employer must issue Form 16 in case tax is deducted at the source. An employee can request his employer to issue Form 16. An individual can countercheck also with the help of Form 26 AS whether the employer has deducted tax at source, In case of failure of the employer to submit the tax then the liability to pay your tax lies with the assessee himself, which he can claim later by his employer. In case the employer has not issued Form 16, then also you should file your tax return and claim it later.

Form 16 Is A Mandatory Certificate

Form 16 contains most of the information required for you to prepare income tax returns in India. As it consists of many components therefore it is important to understand all its colours for smooth functioning.