Form 16: First time filing income tax returns?
The process of filing income tax returns has been started, amid the process the government making Aadhaar card mandatory to file income tax returns.
PAN number is mandatory to file income tax returns. The government has announced on March 21 that it has made Aadhaar card mandatory to file ITR.
If you are filing your income tax returns first time then you must need to know about the very important form: Form 16.Most of the time especially salaried employees who are filing their income tax returns first time don’t know what to do or figure out with the form- 16 when their employer hands over this form to them.
We will discuss Form 16 in detail which will help you to understand the benefit and importance of this form.
What is Form 16?
Form 16 is a certificate issue by your employer every year. Form 16 is a certificate under section 203 of the Income-Act, 1961 which certifies that TDS has been deducted from your salary by the employer.
According to the income tax rules of India, if an employer deducts TDS on salary then he must issue income tax Form 16.
Understanding the content of Form-16, it will help you to file your income tax returns.
Form 16 has two sections: Part A and Part B.
Form 16 Part A:
Part A consists of your personal details such as your name and address, your employer’s name and address, PAN of both, employer’s Tax Deduction Account Number (TAN) and other. This detail helps the I-T department track the flow of money from you and your employer’s accounts.
- Name and address of the employer.
- PAN of the employee.
- TAN and PAN of employer.
- Summarily of tax deducted and deposited quarterly, which is certified by the employer.
- Assessment Year.
- Period of employment with the employer.
- Part A of the form 16 has a unique TDS certificate number.
It gives the summary of the TDS by the employer on behalf of the employee. This is the amount that the employer deducts from your salary as tax periodically and credits to the I-T department. For example, if every month your employer deducts Rs.3, 000 as tax from your salary, it will be shown in the Form 16 as deposited by your employer to the government.
Form 16 Part B
Part B of form 16 include most of the details that you need to file I-T return, such as salary paid, other income, tax deducted and more.
- Taxable Salary
- Deduction allowed under the income tax act
- Breakup of Section 80C deductions.
- If you held more than one job during the year, you will have more than one Form 16.
- Part B is prepared by the employer manually and issued along with Part A.
Deductions are mentioned in the form 16 Part B. These include those under sections 80C, 80CC and 80CCD.Remember the aggregate under amount deductible under these three sections should not exceed Rs.1 lakh. Then come the deductions under other sections such as 80D (health insurance premium), 80E (interest on education loan), 80G (Donations), and others.
While all deduction related details are mentioned in Form 16, you should cross-check the amounts with your investments and other documents.
Form 16 is one of the documents that you need to keep handy before or while filing your income tax returns, which has to be done till 31 July.
In case of any error in Form 16 then you have to contact to your employer for rectify the error as he is the one who issue the form.
One important thing to remember that form 16 only declares TDS from salary. For other incomes, there are other forms, income from bank fixed deposit will in Form 16A.So, if you have interest income from Bank FD, then you will have to get Form 16A from the bank.
Another important form is Form 26AS, the tax credit statement. It will help you verify details of TDS. Using this form you can check if your company or bank has indeed paid the tax correctly reported to the I-T department.
To file your income tax returns you can upload your Form 16 on TruTax. Filing ITR on TruTax is simple, convenient and takes 5 minutes to complete the process. If you are filing your income tax returns then you can contact us for any taxation advice.