What is Form 16? | Everything about Form-16: Decoded

Business Standard What is Form 16? | Everything about Form-16: Decoded

We are familiar with the wait for a document called Form 16 in order to file income-tax returns. Ever wondered what Form 16 really is and what it tells about the taxpayer?

Let's talk about the significance of one of the most important documents for taxpayers in India.

First, let's first understand… What is Form 16?  

A certificate detailing tax deducted at source by your employer Issued by an employer to its employee under Section 203 of the Income Tax Act



Contains all the information you need in order to file your income tax return

What does Form 16 contain?  

Salary details Tax already deducted

Basically, it provides details about the salary you have earned during a financial year and the amount of tax that has been deducted by your employer and deposited with the I-T department.

Is it mandatory for employers to issue Form 16?

Yes, it is mandatory if any tax has been deducted at source from an employee's salary What if an employee has changed jobs in the same financial year?

If you have changed jobs or worked for more than one employer at the same time during a year, and the tax has been deducted by more than one employer, you will be issued separate Form 16s by these employers.

Now, you must have noticed that every Form 16 has two components – Part A and Part B. What do these parts contain?

Part A of Form 16 provides details of the tax deposited in the government's treasury every quarter. It also has details of your permanent account number, your employer's tax deduction account number, and other such information.

Your employer can generate and download Part A of Form 16 through the TRACES portal.

Read Complete Article