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Generate Income Tax Form 16 for Salaried Person

Swarit Advisors

| Updated: Apr 09, 2019 | Category: Income Tax

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

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.

Contents of Income Tax Form 16 – Part A and Part B

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.

Form 16 Part A contains the following details:

  • Certificate number
  • Name and address of the employer and the employee
  • PAN and TAN of the deductor
  • PAN of the employee
  • Employee ID or reference number provided by the employer
  • Assessment year for which Form 16 relates to
  • Duration in the financial year for which the salary is paid (beginning month and ending month)
  • Date of deduction of TDS from salary
  • Date of deposit of TDS to government
  • Quarterly details of TDS deducted and deposited to government
  • Acknowledgment Number of the TDS challans

One can generate Form 16 Part A for salaried persons through the TRACES portal of the Indian Government.

Income Tax Form 16 Part B contains every detail and breakup of the salary as under:

  • Total Salary Received containing basic salary, all allowances, and perquisites
  • Exemptions Allowed if applicable
  • Gross Income
  • Deductions From Salary
  • Net Taxable Salary
  • Income tax on taxable salary
  • Education Cess and surcharges, if applicable
  • Rebate under Section 87, if applicable
  • Relief under Section 89, if any
  • The total tax payable on income
  • Tax deducted and the balance tax due or refund applicable
  • For form 16 part-B contact your employer, it is his/her responsibility to provide you form 16b.
  • What are the advantages of form 16?
  • Form 16 is advantageous to employees for the following reasons:
  • Form 16 serves as a proof of deduction of TDS by the employer. The employee need not pay any tax further except to the extent of additional tax liabilities if any.
  • The components of Form 16 are quite comprehensive; it helps salaried individuals to file their returns themselves without taking any professional assistance.
  • Form 16 also serves as a document for tax compliance during tax investigations.
  • It is accepted by Banks and financial institutions as supporting documents for loan applications.
  • Various visa checklists demand Form 16 as a mandatory document for visa application.

What are the advantages of form 16?

Form 16 is advantageous to employees for the following reasons:

  • Form 16 serves as a proof of deduction of TDS by the employer. The employee doesn’t need to pay any tax further except to the extent of additional tax liabilities if any.
  • The components of Form 16 are quite comprehensive. It helps salaried individuals to file their returns themselves without taking any professional assistance.
  • Form 16 also serves as a document for tax compliance during tax investigations.
  • Banks and financial institutions accept this form as supporting documents for loan applications.
  • Various visa checklists demand Form 16 as a mandatory document for visa application.

Generation of Form 16 Part A for salaried individuals

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:

Step 1: Login on the TRACES website

Visit the TRACES website at www.tdscpc.gov.in. Log in through the User ID, Password, TAN (of the Deductor), and with Verification Code.

Step 2: Put a request for Form 16a

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.

Step 3: Download the income tax form 16

After landing on the home page, click on “Form 16” option under the tab named “Download

Step 4: Choose the required Financial Year

Choose the relevant Financial Year (FY) for which the Form 16 Part A shall be downloaded.

Step 5: Select from either option- Search PAN download or Bulk PAN download

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.

Step 6: Submit after the profile completion

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.

Step 7: Fill up the KYC details

Fill in the KYC details after selecting one of the following:

  • Digital Signature which is supported by KYC: It can be selected only if Digital Signature is registered in the TRACES portal.
  • Normal KYC Validation: This can be chosen when Digital Signature is not registered in the portal.

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.

Step 8: Request number generation

A unique “Request number” will generate only after the submission of the request.

Step 9: Form 16 Part A will be available

Form 16 Part-A will be available after 24-28 hours.

Step 10: Download the form 16

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.

Step 11: Convert the form into a readable format

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.

Which individuals are eligible to receive form 16?

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.

Conclusion

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.

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