Here's what you need to do with your Form 16 before July 31
Mudit Kapoor June 26, 2018
The due date for filing income tax returns for the financial year 2017-18 is July 31, 2018. Form 16 plays a helpful hand in filing the income tax returns especially after the changes in the ITR forms. Let's analyse how:
What is form 16?
A Form 16 is an income tax certificate issued to salaried individuals by their employer when a deduction for tax is being made in the employee's salary. In simpler terms, it is a proof which states your tax obligation arising due to employment has been deposited with the income tax department.
Form 16 is a crucial document that is issued in accordance with the provisions of Income Tax Act, 1961. A form 16 contains details of tax deducted at source (TDS) on salary by your employer along with the salary breakup for the financial year. Form 16 contains all the necessary details required to fill the income tax returns by the employee for a particular financial year.
Who issues Form 16?
According to Income Tax Law, the employer who holds a Tax Deduction and Collection Account Number (TAN) and deduct tax on salary of employee should issue Form 16. If your tax is not being deducted then your employer can refuse to issue Form 16 to you. In case you have lost your Form 16 then you can retrieve it from your e-mail or ask the employer to provide a copy of the same.
When is Form 16 issued?
For a particular financial year Form 16 must be issued latest by May 31. For example, for the F.Y. 2017-18, the due date for issue of Form 16 shall be May 31, 2018. If any employer delays or fails to issue Form 16 by the specified date, then the employer is liable to pay a penalty of Rs.100 per day till the form is issued.
Form 16 is divided into two parts, Part A and Part B.
Part A of the form 16 contains quarter-wise details of your tax deposited with the government by your employer. It also contains basic information like PAN of both employer and employee. The current assessment year for which tax is being deducted and TAN number of the employer. Part A contains the following details:
Part B of the form 16 contains the total amount of salary paid to the employee during the current assessment year by the employer. The salary is broken down in accordance to the deductions available under Section 80C such as EPF, life insurance premium, PPF, NSC etc. and tax is calculated according to the latest tax slab issued by the Income Tax Department. Part B contains the following details:
Why is Form 16 important?
Form 16 is a crucial document from tax perspective as it:
Before July 31, taxpayers need to submit the tax returns to the Income Tax Department so that excess tax deducted during the year can be reimbursed. Form 16 is important for e-filling income tax returns. Form 16 contains all the required fields along with the tax deduction breakup made during the year by the employer in Part A of the form. Part B contains the income and allowances details of the taxpayer along with the exemptions claimed. For resident individuals having income from salaries, one house property, other income up to Rs 50 lakhs, ITR-1 form would be applicable. Also as per recent changes in the ITR forms, now taxpayer would have to furnish break-up of their salary which would be easily available in Form 16.
Important Information: According to the new changes effective from 1 April 2017, if taxpayers do not file their return within the due date which is July 31 in the current year, there would be a levy of up to Rs 10,000 under Section 234F.