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Form No 16- What You Need to Know
May 09 , 2013

All salaried employees whose income is taxable get form 16 from their employers, usually after the end of the financial year. Form 16 is a tax related document showing details of your salary and tax deducted on it in the previous year. Here is a primer on income tax form 16.

What is form 16?

Form 16 is a declaration of your salary with its break-up and income tax deduction on it in the previous financial year. It also has employer related details such as name, address, PAN, TAN of your employer and your name, designation and PAN.

Form 16 has two parts. Part A shows tax computation and has all details of salary, perquisites, other income (if you have reported it) and tax deducted on them. Note that if you have other income, say interest from FD, this can be shared with the HR and they will deduct applicable tax on this income as well. If you don't do it you can clear this tax liability by paying self assessment tax. Form 16 shows total taxable income including allowances granted to you after applying eligible deductions under chapter vi a (80c, 80d, 80e etc).

Part B of form 16 has details of tax deducted and deposited in government account. It has break-up of tax including TDS, surcharge and education cess. Here you will also find dates on which tax was deposited with the bank, cheque/dd number (if applicable) and challan numbers.

Who issues form no 16?

According to Income Tax rules it is mandatory for employers in companies to provide form 16 to employees whose tax on salary has been deducted at source. It has to be issued once a year by 31st May. If your salary is not taxable your employer might not issue form 16.

Purpose of form 16

You need form 16 for reference while filing income tax returns. Most of details in ITR forms just need to be copied from form 16. While filing tax returns you declare your tax liability and tax payment. Form 16 is the proof of tax payment on salary income.

Form 16 is also part of documentation for most loan applications these days because it is the best proof of salary.

How to get form 16?

If your employer has not provided form 16 for the previous year you can ask for it. You can view consolidated report of taxes deducted in form 26AS. This can be downloaded from the government's TRACES site. Only deductors can download form 16 from traces site.

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