- Purpose of Form 16
- Types of Form 16
- Different components of Form 16
- Eligible for Form 16
- To File ITR with Form 16
- The benefits of Form 16
Form 16 is provided by employers to salaried people within the country. It contains all the knowledge needed by the worker at the time of filing his/her taxation returns with the taxation department of India. Form 16 may be a document that contains all details needed to file the taxation returns. Employers can give type sixteen to workers at the top of each fiscal year.
Purpose of Form 16
Form sixteen will be an important document for the subsequent reasons:
- It works as a signal that your leader has subtracted tax from your wage and deposited it with the govt
- It helps within the taxation returns filing method
- It is typically requested by banks and monetary establishments once you approach them for loans
Types of Form 16
The two kinds of Form-16 are:
- Form 16-A: This type provides an outline of the tax collected by the leader or organization from the wage of the worker and deposited with the IT Department. This type is on behalf of the worker.
- Form 16-B: Part-B is a consolidated statement that has details like wage paid, deductions (if any), and the other financial gain disclosed by the worker or leader.
Different components of Form 16
The two different components of type sixteen are mentioned below:
- Part A
- Part B
Before the certificate will be provided, authentication should be provided by the leader. just in case you progress to a brand new job, the new leader should give a type sixteen likewise. Every new leader should give the shape sixteen. Most parts of half A are mentioned below:
- Employer’s name and address
- Employer’s PAN and TAN
- Employee’s PAN
- Details of the tax subtracted and deposited every quarter
An annexure to the primary a part of Form 16, half B has the below-mentioned components:
- Salary breakup (detailed)
- Breakup of the allowances below Section ten of the taxation Act thoroughly
- Deductions allowed below Chapter VI A of the taxation Act
- Any relief below Section eighty-nine of the taxation Act
Eligible for Form 16
Any individual who earns a wage and should file tax returns is eligible for Form 16. Just in case people needn’t file tax returns, they don’t need to submit type sixteen. However, employers issue the certificate so that a track of their earnings will be maintained.
To File ITR with Form 16
There are bound bits of data that are needed once filing your ITR. These details will be found in type sixteen. They embody the following:
- Allowances that are exempt below Section 10 of the taxation Act
- Taxable wage
- A breakup of the deductions below Section 16 of the taxation Act
- Income from house property provided for TDS
- Income from different sources provided for TDS
- A breakup of the deductions below Chapter VI-A of the taxation Act covering the deductions below Section 80C, Section 80CCC, Section 80CCD(1), Section 80CCD(1B), Section 80CCD(2), Section 80D, and Section 80E of the taxation Act
- Aggregate of deductible quantity below Chapter VI-A of the taxation Act covering the deductions below Section 10(a), Section 10(b), Section 10(c), Section 10(d), Section 10(e), Section 10(f), Section 10(g), Section 10(h), Section 10(i), Section 10(j), and Section 10(l) of the taxation Act
- Refund due or web tax collectible
Additional details from type sixteen are needed for filing your taxation returns
- Tax subtracted at supply by the leader
- Employer’s TAN
- Employer’s PAN
- Employer’s name likewise as address
- Present assessment year
- Name and address of the payer
- PAN of the payer
To calculate your wage financial gain if you have got not received type sixteen from your employer? Sometimes, employers don’t give type sixteen to workers whose annual wage is below the minimum non-exempt limit (Rs.2.5 lakh). just in case you would like to file your taxation returns while not type sixteen, you’ll need to consult with your bank statements, payslips, equity credit line or education loan certificates, tax-saving investment proofs, Form 26AS, etc. Your payslips can contain data concerning your basic wage likewise as allowances, whereas type 26AS can know about all the taxes you have got paid and also the taxes that are subtracted.
The benefits of Form 16
Some of the advantages of the shape sixteen are as follows:
- It acts because of the ‘income from salary’ statement of the individual.
- It helps at the time of filing tax returns.
- it’s a supporting document for the supplying of a visa.
- It acts as a signal of financial gain.
- It helps keep a tab on all of your tax-saving investments.
- It provides a transparent image of the computation, payment, and refund of your taxes