What is Form 16? Why is it necessary? Where can you get it from? Are you eligible for it? Many other questions answered

What is Form 16? 

Form 16 is a detailed statement by your employer of the salary paid to you and the Tax Deducted Source (TDS) during a financial year. The Income Tax Department cuts TDS from your salary on a monthly basis. 

Why is Form 16 necessary?

Since Form 16 has a detailed breakup of your salary, it helps you immeasurably while filing your income tax return.

You will get your salary information (segment-wise) from Form 16 and fill out that information on the ITR website or any other website helping you file ITR.

Since Form 16 has columns for different aspects of your salary and investments, there are fewer chances of getting confused while filling out the same information in your ITR (offline or online) form.

When will Form 16 be available?

For 2022–23, Form 16 will be available on June 15, 2023.

It means if your employer has cut TDS from April 2022 to March 2024, they have to provide you Form 16 by June 15.

If you have changed jobs during the financial year, then you have to request Form 16 from your old employer as well as your new employer.

They are bound to provide you form for filing an ITR. 

Am I eligible for Form 16?

Only those employees are eligible for Form 16 whose salary bracket falls under the income tax range.

If your salary doesn't fall within the range of income tax and the company doesn't cut TDS from your salary, it is also not obligated to provide you Form 16.

However, some companies have changed the trend and now provide Form 16 to all their employees, irrespective of the salary bracket.

They say it helps their employees have a clear picture of their salaries.       
  

What does a Form 16 contain?

Form 16 has two parts: Part A and Part B. The first part has segments like

Name and address of the employer

PAN of the employee

TAN and PAN of the employer

Summary of tax deducted and deposited quarterly, which an employer certifies 

Part B   

 
Part B of Form 16 mainly features things like the breakup of salary and deductions under Chapter VI-A. Some of the information under Part B includes

Allowances exempted under Section 10

Taxable salary

Breakup of deductions under Section 16

Tax payable or refund due

Income (or admissible loss) from house property reported by an employee and offered for TDS

Income under the head ‘Other Sources’ offered for TDS

The aggregate of Section 80C deductions (gross and deductible amounts)

Breakup of Section 80C deductions

Form 16—Part B

It shows your name (taxpayer’s), address, and PAN. You can also find additional information about your employer on your Form 16 while filing your annual return, such as:

TAN of employer

PAN of employer

Your PAN

TDS deducted by the employer

Name and address of employer

Current assessment year

Things to be taken care of while checking Form 16

After an individual gets Form 16 from their employer, it is their responsibility to check if all the details are correct.

One should cross-check information mentioned in Form 16, e.g., details of the amount of income, TDS deducted, etc.

If any of the details is mentioned incorrectly, one can connect with the organisation’s HR/Payroll/Finance department and get the same corrected.