Income Tax Return: Definition, Slabs, ITR Forms, Benefits, eFiling, Penalty
Income Tax Return (ITR) is no less than a nightmare to taxpayers. After all, who likes to pay tax? Possibly, nobody. But if you don't file ITR in time, you...
Form 16 is issued under Section 203 of the Income Tax Act 1961 to salaried individuals by their employers. It is in the form of a document which contains the breakup of the entire salary details of the individual for a particular financial year and the tax liability that has been deducted from the salary. It is generally issued on or before 31st May of the financial year immediately succeeding the fiscal year to which it. To understand the significance of Income Tax Form 16 in detail, continue with the blog until the end.
Income Tax Form 16 comprises of two main parts i.e., Form 16 Part A, wherein the income tax act mandates every employer to deduct TDS (Tax deducted at source) from the salary before paying the same to the employees. Typically, the TDS is a percentage of the total tax liability of the employee for the financial year. Companies generally calculate tax liabilities of employees at the beginning of the year on the basis of their forecasted earnings and investment claims made by employees. Form 16 Part B contains the detailed summary of gross salary, TDS deducted, investments taken into account, and net Income Tax liability.
As we know, Form 16 is divided into two parts: Part A and Part B. Each part of the form is distinct from each other and hence, the contents of both forms are also different. Let’s start with the contents of form16a.
One can generate Form 16 Part A for salaried persons through the TRACES portal of the Indian Government.
Form 16 is advantageous to employees for the following reasons:
Anybody who requires the form can generate Form 16 Part A from the TRACES portal of the Income Tax Department by following the below- mentioned steps:
Visit the TRACES website at www.tdscpc.gov.in. Log in through the User ID, Password, TAN (of the Deductor), and with Verification Code.
One can request for Form 16 Part-A only for TDS return 24Q for the concerned Financial Year is filed and processed with or without Processed with default.
After landing on the home page, click on “Form 16” option under the tab named “Download”
Choose the relevant Financial Year (FY) for which the Form 16 Part A shall be downloaded.
Select from either of the options – “Search PAN download” or “Bulk PAN downloads” and proceed by clicking “Go”. One can also download it through “Search PAN download”. Through “Bulk PAN download” one can download Form 16 Part-A for all valid PAN holders for the selected Financial Year.
On the screen Authorized Persons, details will appear. If details are fine then Click on “Submit” or else click on “cancel” “and visit the profile section to update the credentials.
Fill in the KYC details after selecting one of the following:
After submitting the correct KYC details, an authentication code will be provided on the screen. It will be valid for the same calendar day of making the request.
A unique “Request number” will generate only after the submission of the request.
Form 16 Part-A will be available after 24-28 hours.
Visit the website after 24 hours, log in and go to “Download”. If the status of the Form seems available then go to “Requested Download” and select either “HTTP download” or “Download Manager”. HTTP Download is useful for downloading small files while Download Manager is useful for large files.
After Downloading, one can use “Form 16 PDF Converter Utility 1.4 L” from the TRACES website in order to convert Form 16 Part-A into readable PDF format.
As per the Ministry of Finance, every salaried individual who falls under the taxable bracket is eligible to receive Form 16 from its employer.
Although issuing Form 16 to employees who do not fall under taxable bracket is not mandatory. However, if the employer desires, he/she can issue Form 16 to every employee as a good governance practice.
It is the responsibility of the employer to prepare and issue form 16 to the employees. As per the Income Tax Act 1961, failure to issue form 16 to employees will lead to a penalty under the said act. However, the onus to file Income Tax Return will be on the employee. Though Form 16 serves as a tax compliant certificate, it does not amount to the filing of Income Tax Return.
Besides, if you are looking for a professional to help you with ITR filing, contact Swarit Advisors. We will file the income tax returns in the least possible time and at quite a nominal charge.