The new Form 16 is basically a certification issued by the employer which shows that TDS has been deducted on the behalf of the employee and deposited with the authorities. It has to be issued by the Employer to the Employee under Section 203 of the Income-tax Act, 1961. It has two sections—part A and B.
The Form contains all the information needed to prepare and file your income tax return. The Form is issued just after the end of the financial year i.e. 15th June of every year to follow the tax deduction of the financial year.
Form 16 constitutes of 2 parts- Part A & Part B. Part A of the form has to be downloaded from the TRACES Portal (https://www.tdscpc.gov.in/app/login.xhtml) by the employer.
Part A
If a person has changed jobs in a financial year then they will be provided separate Form 16 Part A by the employers for different periods of employment.
The information that needs to be provided in Part A of Form 16 is:
Name and address of the employer
TAN (Tax Deduction Account Number) & PAN (Permanent Account Number) of employer
PAN of the employee
Summary of tax deducted & deposited quarterly, which is certified by the employer
Part B
The Part B of Form 16 is basically an annexure to the Part A. If a person has worked for multiple employers during the financial year then they can decide if they want Part B from all the employers or just the last one.
The information (newly for FY 2019-20) that is needed to be provided in Part B of Form 16 is:
1. Detailed breakup of salary
2. Detailed breakup of exempted allowances under Section 10
Leave travel concession exempt under Section 10(5)
Death cum retirement gratuity exempt under Section 10(10)
Commuted value of pension under Section 10(10A)
Leave encashment under Section 10(10AA)
House Rent Allowance under Section 10(13A)
3. Deductions allowed under the Income Tax Act (under chapter VIA):
Specific fields are notified for deductions mentioned below:
Deduction for life insurance premium paid, contribution to PPF, etc., under Section 80C
Deduction for contribution to pension funds under Section 80CCC
Deduction for employee’s contribution to a pension scheme under Section 80CCD (1)
Deduction for taxpayer’s self-contribution to a notified pension scheme under Section 80CCD (1B)
Deduction for employer’s contribution to a pension scheme under Section 80CCD (2)
Deduction for health insurance premium paid under Section 80D
Deduction for interest paid on loan is taken for higher education under Section 80E
Deduction for donations made under Section 80G
Deduction for interest income on savings account under Section 80TTA
