Income Tax: All You Need to Know About Form 16

If you are new to the process of filing Income Tax Return (ITR), then it’s natural for you to have certain doubts. While the majority of aspects of the process are easy to figure out, there are certain things that can be more challenging. One of these is form 16.

What is form 16?

Form 16 is akin to a salary certificate for a particular financial year. It contains the details like the annual salary paid to you and the TDS deducted on the same by your employer. It also contains other details like your tax liability, deductions claimed, etc.

Form 16 is initiated by the Indian Income Tax Department under Section 203 of the IT Act, 1961 to provide details of the Tax Deducted at Source (TDS). It’s usually issued in the month of April every year and you can use it to file your ITR as it contains all the relevant details.

Who is required to fill it?

As per the FinMin norms, every salaried individual whose income falls under the income tax bracket is required to file form 16 every fiscal year.

Where can you get the form 16?

Form 16 is usually provided by your employer. However, you can also download it from the official website of the income tax department.

What’s the significance of form 16?

Form 16 is important because:

• It serves as a summary of your total earnings and the total TDS deducted from your salary. Thus, it’s used to gather the information when filing your ITR.
• Banks often ask for this form when you apply for loans. This is because it can serve as a proof of your income.
• ITR norms demand that you fill the form if your salaried income falls under any tax bracket.

Do you need to submit form 16 when filing ITR?

It’s a misconception that you have to file form 16 when filing the ITR. The truth is that this form is merely a salary certificate for your use. However, it can also be used by taxmen to compare with the form 26AS for any discrepancies in the payment of taxes.