Form 16 is a certificate of TDS (Tax Deducted at Source) that employers issue to their employees. It serves as proof of the taxes deducted from the salary of the employee and remitted to the government by the employer. Form 16 is essential for filing income tax returns in India, and it provides a detailed summary of the employee's earnings, tax deductions, and other related details. Key Components of Form 16: 1. Part A: Details of Tax Deducted: This section contains details about the tax deducted at source (TDS), including the employer's name, PAN, TAN (Tax Deduction Account Number), and the employee's PAN. Summary of Salary Paid: It provides a summary of the total salary paid to the employee during the financial year, along with the amount of tax deducted. Details of the tax deposited with the government, like the Billed Tax and the Challan Details. 2. Part B: Detailed Salary Breakdown: It includes detailed information about the employee's salary components such as basic salary, allowances, bonuses, etc. Taxable Income Calculation: This section provides the details on how the taxable income is calculated, including the exemptions claimed (like HRA, tax-free allowances, etc.), deductions under Section 80C (like PPF, EPF), and any other tax deductions. Deductions under sections like 80C: Contributions to EPF, PPF, insurance premiums, and other eligible deductions. Tax Computation: This shows the final tax computed, including any rebate, tax credits, or adjustments. Important Points: When is Form 16 issued?: Form 16 is typically issued by the employer after the end of the financial year, by 31st May of the following assessment year. It covers the income earned and the taxes paid for the previous financial year (April to March). Significance for Filing Income Tax Returns: Form 16 helps individuals file their income tax returns (ITR) accurately. It's the primary document used to file taxes online. If there’s a mismatch between the TDS shown in Form 16 and the actual taxes paid or deducted, the employee should raise the issue with the employer or the tax department. Verification: Before filing your return, it's crucial to verify that the TDS mentioned in Form 16 matches the TDS records in the Form 26AS, which is available through the income tax portal. Form 26AS shows the TDS deposited with the government. In essence, Form 16 is a consolidated statement that confirms the amount of income, tax deducted, and other tax-related information for a specific financial year, making it easier to file returns and ensure compliance.

Dear Client, Form 16 is a type of income tax report which is issued by an employer to his employees which details out the salary which an employee has earned and also the Tax Deducted at Source (TDS) in a financial year. This form is useful to the employee at the time of filing of Income Tax Return (ITR) also it serves as a proof that tax has been deducted from the employee’s salary and paid to the government. Key points about Form 16: Issued pursuant to Section 203 of the Income-tax Act, 1961. Part A contains info on the employer, employee, PAN, TAN, and TDS. Part B reports on salary components, deductions (as in Chapter VI-A) and taxable income. It is a key document for easy and accurate filing. Even though there is no TDS from the employee’s side, some employers may provide a salary certificate. Helps employees in the preparation of financial reports and to claim refunds when tax is over-deducted. I hope this answer helps you to resolve the queries. If the issue still persists, please contact our law firm. Thank you!

FORM 16 is certificate of Tax deduction by the employer to salaried employee.An employer is under obligation to issue Form 16 before specified date,failing may give an ample cause of complaining to Assessing officer by employee reason for not furnishing ITR for Said assessment year.