Form 16 meaning, Form 16A, Form 16B: Form 16 is the essential document for the salaried individual, particularly if the employer has deducted tax upon the income. Form 16 is a certificate given through the employer to the employee that displays the amount of tax deducted on salary income. Form 16 assists in seeing how much tax has been previously filed and what is still left to get furnished for the employee who furnishes his ITR. Employers are required to provide Form 16 to their employees by 15th June of the fiscal year, following the fiscal year where the salary was furnished and the tax was deducted. Therefore, we are also providing a few concepts regarding form 16 and its components and benefits easily, let see brief details mentioned below as well.
What is The Meaning of Form 16?
Form 16 shows the tax deducted at source (TDS) in the fiscal year. The income tax dept deposited the TDS which was deducted through the employer. Moreover, Form 16 indeed mentioned the other income as informed through the employee and several deductions claimed via the employee to diminish the tax liability.
If you are thinking about the method to furnish Form 16 then the same is important to find out that it should not get filled through the employee. Form 16 undergoes pre-filled upon the grounds of the income of the employee and the tax deducted for that year. It is generated through the employer via TRACES software which is an Income Tax Department tool. The employee would see the Form 16 entries or the information about the allowances, perquisites, or the additional income along with the deductions reported through him. The employer would edit the errors if any wrong figure gets revealed through him.
Who is Qualified for Form 16?
Every person who earns a salary and his income comes beneath the tax slabs and the tax has been deducted at source through the employer is qualified to obtain the Form 16. If the yearly income of the employee is below the threshold limit then the employer is not mandated to issue Form 16. However, if the employer has deducted TDS on the employee’s monthly income then Form 16 is required to be furnished to the employee.
Is Form 16 Compulsory for Salaried Employees?
Form 16 is essentially furnished through the employer to the employee if he has deducted TDS upon the employee’s income, as Form 16 poses a tax certificate that holds the information of the income earned and TDS deducted in the fiscal year. Form 16 assists a salaried employee to furnish the ITR specifically when there is no other source of income for the employee.
What is The Method to Get Form 16? Can I Get Form 16 Online?
Download Form 16 for salaried employees: Through the TRACES portal Form 16 would get downloaded via the employer prior to transferring the same to the employee. A brief division of the allowances and perks obtained via employee and with the Standard Deduction is required to be mentioned in Form 16. Form 16 poses 2 portions One is Form 16A, and the additional is Form 16B.
Read Also: Gen TDS Software for Filing Form 15CA and 15CB
What is Form 16A for Salaried Employees? Form 16A Components:
Part A of Form 16 provides a summary of the tax collected upon the grounds of the employee from the salary income and deposited in the account of the government. Below mention are the elements of Form 16A:
- The employee and employer’s personal information: For example, the name of the employer as well as the employee, address details, PAN information of both employee and employer, and the employer’s TAN information. TAN is the number allotted to an account responsible for the deduction and collection of tax.
- Assessment Year (AY): The same direct to the year where the income gets examined which means that it is the year where the assessee is required to work on the tax return processes. For example, if the income is made between 1 April 2016 and 31 March 2017, the Assessment Year shall be 2017-18.
- Time period: The duration towards which the assessee was used with the employer or companies in the related Fiscal Year.
- Overview of the salary paid to the employee
- The date on which the tax was deducted via salary.
- The date on which the tax deposit in the account of the government is created.
- Overview of tax deducted and deposited quarterly to the Income Tax Department.
- Acknowledgement Number of the TDS Payment
What Do You Mean by Form 16B? Form 16B Components:
Salary Received: The portion shows the total salary framework of the employee. The salary is moreover broken down into different elements like Leave Travel Allowance (LTA), Leave Encashment, House Rent Allowance (HRA), Gratuity, etc.
Exemptions Allowed: These allowances are provided to the employees under section 10 of the Income Tax Act, 1961, for Conveyance, HRA, and Children’s education. Hostel expenditure, medical, and others are said to be written in Form 16B.
Deductions From Salary: Rs 1.5 lakh will be the highest limit beneath the same. Beneath Section 80C/80CCC/80CCD, subsidies driven for the investments like Public Provident Fund, Pension Plans, Life Insurance policies, Tax Saving Mutual Funds, Sukanya Samriddhi Scheme, in between the others like Section 80D and Section 80E are indeed engaged in it.
Gross Income: The gross income is the sum of the total salary obtained from the employer and any additional income mentioned through the employer that consists of the income earned via house, property, or others. In the subsequent phase of the investment proof submission, information about the additional income is required which is to be shared through the employee with the employer.
Net Taxable Salary: the total deductions get eliminated from the gross income to compute the income subject to tax. The tax liability of the assessee gets computed on the same amount.
Education Cess and surcharges, reimbursement beneath Section 87, relief under Section 89 are also contained in it.
The total amount of tax entitled to pay on income, tax deducted, and the balance tax left or refund relevant are also cited.
In some conditions, if taxpayers are looking for the best Gen TDS software for form 16 generation and compliance work, SAG Infotech developed this software along with 16A, 16B, etc.
