Your Guide to Form 16 and Filing Income Tax Return

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What is Form 16?

Form 16 is a certificate (or document) issued to salaried employees by their employers after they deduct tax from their salary. It is used by companies to inform their employees about the amount of tax that has been deducted by them and paid to the authorities. 

The certificate contains proof of the amount of the entire details regarding the salary given by the organization or employer to the employee in a particular financial year and the income tax that has been removed from the salary of the individual by the payer. 

You can also think of Form 16 as your Salary TDS certificate. In case, the income from your salary for the financial year is more than the basic exemption limit of Rs. 2, 50, 000 then, your employer is required to deduct TDS on your salary and deposit it with the government. And if your income does not fit the basic exemption limit, the employer does not deduct any TDS in that case.

Parts of Form 16

 Form 16 consists of two parts i.e. Part A and Part B.

Form 16A: Form 16A consists of information of the employer & employee, like the PAN and TAN details, name and address, TDS deducted & deposited, etc.

Form 16B: Form 16B consists of details like other income, deductions allowed, salary paid, tax payable, etc.

Form 16 is annually issued by the employer on or before 15th June of the next year, where it immediately follows the financial year in which tax is deducted. Also, in case you lose Form 16, your employer can issue a duplicate one.

Components of Form 16 online for salaried Employees with example

Form 16 is one of the important documents needed to file your ITR and you have to obtain this document from your employer. Even if you have left your job, you can demand it from your previous employer.

Form 16A

This part of the Form includes:

• Your gross salary (salary without any deductions) including any prerequisites received by you.
• All the allowances paid to you by the company, be it Conveyance Allowance, Housing Rent Allowance etc.
• Total income charged under salaries.
  
  

  

Form 16B

Here is what it looks like:

This section would include all the investments you have made, along with the tax benefits received by you for the same. Here are some main components of Part B:

1. Taxable Salary
2. The breakup of Section 80C Deductions
3. An aggregate of Section 80C Deductions, which contains the record of Gross and deducted amount.
4. The Tax Deducted at Source, i.e. TDS
5. Tax Payable or Refund Due

What are the Different Types of Form 16?

Although they sound similar Form 16 is different from Form 16A. Other than the main form 16, there are two types of Form 16 – Form 16A and Form 16B. Let’s understand more about Form 16A and Form 16B:

Form 16A

Form 16 part A is generated and downloaded by the employer. The employer executes this task through the TRACES portal, which is the official TDS website. This is a very significant part and hence, before issuing the certificate, it is cross-checked for authentication purposes, so as to verify the contents provided by the employer.

An important point that you wouldn’t want to miss out on is that if you switch jobs in one financial year, each employer that you have worked under will issue a separate Part A of the form, issued for the total period of your employment.

By now, you might have been curious about the contents of this part. Here are some of the major components of Part A –

1. Personal details like name and address of the employer
2. TAN & PAN of employer
3. PAN of the employee
4. Summary of tax deducted & deposited quarterly, which has to be certified by the employer
5. Date of tax deduction from the salary and the date of tax deposit in the account of the government
6. Assessment Year (AY) – This refers to the year in which the income is getting assessed or in other words, the year in which the taxpayer needs to work on the tax return processes. For example, for the income earned between 1 April 2019 and 31 March 2020, the Assessment Year will be 2020-21.

In a nutshell, this part of Form 16 mainly concerns your personal details and the total tax you are eligible to pay.

Form 16B

Form 16B is an annexure to Form 16A. It primarily consists of computations where the tax is calculated after the deductions (Section 80C and other various tax-saving allowances). Here are some main components of Part B.

1. Taxable Salary
2. The breakup of Section 80C Deductions
3. An aggregate of Section 80C Deductions, which contains the record of Gross and deducted amounts.
4. Tax Deducted at Source, i.e. TDS
5. Tax Payable or Refund Due

In a nutshell, Part B is a complete detailed record of the salary received by an employee.

Why are the Benefits of Form 16? (Use of Form 16)

Form 16 is a very useful document. It is mainly used by employees to file their Income Tax Returns. Its components include the taxpaid, the tax return expected and it also helps in tax planning. It stands important while clearing the tax credit. Moreover, it is used as an income proof certificate and for visa processing purposes. It’s very important to seek loans and also to carry forward losses.

Yes, you definitely need Form 16 if you’re a salaried individual who is also a responsible citizen of the country paying all the due taxes on time.

Difference between Form 16, Form 16A & Form 16B

While Form 16, Form 16A and Form 16B are all TDS certificates, the major difference lies between their content and the party that issues them.

Form 16: Form 16 is a TDS certificate that is issued by your employer for your salary. Remember that this is the TDS certificate for all your earnings that are given to you as your salary.  

Form 16A: Form 16A is issued to you by a tax deductor other than your employer. This is the TDS certificate for all your income other than salaries like the interest earned on Fixed deposits or returns on investments. The bank or the AMC that is deducting your TDS will give you a Form 16A stating the full details of the deduction. You will be issued multiple form 16As in case you have multiple sources of income.

It includes the TAN details, which is the abbreviation of Tax deduction and collection account number. The details are included in both, the employer and the employee, along with their names and addresses. Moreover, the assessment year along with the tenure of the work done under the employer is mentioned.

Not only this, Part A also includes the summary of the Tax deducted from the employee’s income and deposited to the government in accordance with the quarterly TDS return filed by the employer.

Form 16B: It includes all the details of the salary paid to an employee in any financial year. All the deductions claimed under section 80 C are also mentioned along with the breakup of your wage.

All the deductions under Chapter VIA, deductions for EPF, PPF, NSC, life insurance premium or health insurance are mentioned in this section.

What is the Eligibility Criteria for Form 16?

Any salaried individual who falls under the taxable bracket is eligible for Form 16. Since Form 16 is your TDS certificate, if your salary is above the exemption limit (Rs. 2.5 lacs), you need to submit Form 16.  

If your net annual salary is less than Rs. 2.5 lacs, you do not have to pay any taxes. If you are a senior citizen, then the maximum limit is raised to Rs. 3 lacs. As you already know by now that this Form is issued by the employer only if the TDS is deducted from your salary. 

If your salary is below the exemption limit, no TDS would be deducted from your salary, and hence, you do not need it. However these days, as a good work ethic, many organizations issue this certificate to the employee even if the salary is below 2.5 lacs as it contains a consolidated picture of the earnings of the individual and has other additional uses as well.

How to Download Form 16?

Form 16 can only be downloaded and issued by your employer. Any individual employee cannot download his/her Form 16. It is a common misconception that an individual can download Form 16 on the TRACES website using the PAN number. All salaried individuals are eligible to get a Form 16 from their employers because if your salary is above the exemption limit, you will require the Income Tax Form 16 in order to file your ITR. 

Employees – Ask for it from your employer

To obtain Form 16 as an employee, you can directly ask your employer. In fact, you can ask for Form 16 from your employer even if you are not working under him currently, in order to file the ITR of the respective financial year.

Employers – Download Form 16 online

As an employer, you can download it from the Income Tax department’s website since only employers are eligible to download this. This Form is available in the PDF Format, which you can download and get printed.

Here are the steps that will help you to download the Form 16 online:

1. Visit the official website of the income tax department, http://www.incometaxindia.gov.in
2. On the search tab on the page, type Form 16.
3. A new page of search results would appear. Click on the first link.
4.  Save it on your device.

What should a receiver check in Form 16?

Once you receive the Form 16 from your employer, it is your responsibility to check and ensure that all the details mentioned in the form are filled correctly. In addition to verifying the personal particulars and details of amount of income and TDS deducted, the most important thing you need to confirm in your Form 16 is the PAN number. If it is mentioned inaccurately, you should immediately reach out to the HR /Payroll/ Finance Department of your organization and get it rectified.

You will be issued a rectified and updated Form 16 by your employer. Besides this, the employer would also need to make a correction from their end by filing revised return of tax, to credit the TDS proceeds to the correct PAN.

Income Tax Return & Form 16

Before you start the tax filing process, you need to make sure that you have all the important documents handy. Here’s a complete list of details required:

Details required from Form 16 while filing your income tax return

1. TDS Deducted by the employer
2. TAN of Employer
3. PAN of Employer
4. Name and Address of Employer
5. Current Assessment Year
6. Employee’s (Taxpayer’s) Name and Address details
7. Employee’s PAN card number.

File your ITR using Form 16

Once you have all these details, you can visit the website Next, visit the website https://www.incometaxindiaefiling.gov.in/home to file your ITR.

Steps to file your ITR using Form 16:

Step 1: Register yourself on the website. Your user ID will be your Permanent Account Number (PAN).

Step 2: Study your tax credit statement in Form 26AS for the financial year 2016-17. The statement is supposed to reflect the taxes deducted by your employer and actually deposited with the government. Note that the TDS in your Form 16 must match with the figures in Form 26AS. You may get a notice from the I-T department in case of any discrepancies.

Step 3: Under the ‘Download’ tab, click on Income Tax Return Forms and choose AY 2017–18 (for the financial year 2016–17). Download the Income Tax Return (ITR) Form that is applicable to you.

Step 4: Once downloaded, open the Return Preparation Software (excel or Java utility) and fill in the Form by entering all the required details by using your all documents.

Step 5: Calculate and verify the tax payable by you by clicking the ‘Calculate Tax’ tab. Pay tax (if there is any tax applicable) and enter the challan details in the tax return.

Step 6: By selecting the ‘Validate’ tab, you will confirm all the information entered in the worksheet.

Step 7: Do not forget to generate an XML file and save it on your local device, for example, your computer.

Step 8: Next, you need to go to ‘Upload Return’ on the portal’s left panel and then, you have to upload the saved XML file after selecting ‘AY 2016-2017 ‘ and the required Form. You will be asked if you wish to digitally sign the file. If you have obtained a DS (digital signature), choose Yes. Otherwise, No.

Step 9: After the website prints the message of successful e-filing on your computer screen, you may consider the process to be finally completed. Soon after that, you would see that the acknowledgement Form Verification (ITR-V) will be generated and you can download and save it for future reference.

Step 10: You could verify online if you wish to, with EVC Pin. Nonetheless, you can also print the Form ITR-V, sign it yourself(preferably in blue ink) and send it only by ordinary or Speed post to the Income-Tax Department-CPC within 120 days of filing your return online.

You might go ahead and file your ITR yourself, however, it is advisable to go to a CA or a Tax Preparer who know the process better and help you in a better way

File ITR Without Form 16

To revise, Form 16 is a basic document that you need to file your ITR every year. However, there might be a chance that you could not get your Form 16, and hence you are starting to freak out. While there might be many reasons as to why you couldn’t get the form, it isn’t that big a problem. Filing the ITR without Form 16 seems impossible to many salaried people, but it isn’t that big an issue.

There are several documents that one can use as a reference to file his ITR in case he does not have a Form 16. Here’s the step by step process that you can follow.

Step 1: Calculate the taxable income from your salary.

You must keep a record of all the pay slips that you receive from your employer within the fiscal year. The salary slips are the main source of information so you cannot lose them. Your salary slips generally provide the figure for the fields required to be filled while providing the complete breakup of one’s salary in his ITR. These fields are salary or Pension, Unexempted allowances, Value of perquisites, Profit in lieu of Salary, and deductions claimed under section 16.

Moreover, if you have worked under more than one employer within a year, you should include the salary slips from all of them.

Step 2: Find the TDS deducted from your salary.

Form 26AS can help you out here, as it contains the information of the TDS deducted on both – your salary income as well as your other incomes. Make sure the figures on Form 26AS match with the TDS deducted because discrepancies are not good news and you might need to talk to your deductor in such a situation. Also, you might as well know by now that you can download the Form 26AS from the TRACES portal.

Step 3: The Income earned from house properties.

If you have let out any of the house property owned by you, you are required to report the rent earned under this tab.

Not only this, if you have taken a house loan and are paying interest on it on the let-out property or self-occupied property, you need not to worry as you are eligible for deductions of the same.

Step 4: Income earned through capital gains and other sources.

If you have invested your money in mutual funds, you need to get a summary statement regarding the same from your broker. However, there’s good news – the gains shall be exempted if held for a year or sold before/on March 31, 2018.

The income earned from bank deposits, RDs, FDs etc. also need to be specified while Filing your ITR. The income earned comes under Taxable income and hence, needs to be shown clearly.

You are bound to report the capital gains from the sale of mutual funds, shares, flat, land, etc. if you have received any.

Step 5: Claim all tax deductions and benefits.

There are various sections under which you can claim deductions – for example, Section 80C (Life Insurance, Employee Provident Fund, equity-linked savings schemes, Public Provident Fund etc.), 80D (Medical insurance premium), 80E (Interest on education loan).

An important point to note here is to know the maximum limit up to which the tax can be exempted, for instance, Under Section 80C, deductions can be claimed up to Rs. 1.5 lacs.

Step 6: Calculate the net taxable income.

Subtract all the deductions from your total income from various sources. The figure obtained is your taxable income. You can compute the tax on this amount using the IT slab rates for the respective financial year.

Step 7: If required, pay additional tax.

It might be possible that you find the total tax paid by you in the fiscal year is less than what is actually payable as per the Form 26AS. You can simply pay the rest of the amount online.

Step 8: Finally, File your ITR

The best and the most hassle-free way would be to e-file your income tax return, without needing Form 16. However, don’t forget to e-verify the same within 120 days.

Is there any link between Form 16 and Form 26AS?

Yes, Form 16 and Form 26AS are linked. When an employer or a deductor says that TDS is deducted on Salary and other income, and deposited with the Income Tax Department, you can easily check if these TDS amounts are actually deposited with the department or not by using the Form-26AS.

Form-26A gives you all the details of Tax credits. It is a form which indicates that the tax

that has been deducted has also been deposited with the government. The form contains details of tax deducted for the taxpayer by deductors (employer, bank etc.). So, TDS deductions that are given in Form 16  can be cross checked using Form 26AS. Remember that the TDS amounts reflected in Form 26AS and Form 16 should always match.

Form 16 – FAQs

Here’s a list of the most frequently asked questions about Form 16 with the correct answers to them:

What happens if an employer doesn’t give Form 16?

If an employer doesn’t give you form 16, the biggest reason for that could be that no TDS was deducted from your salary. It might be possible that your salary is within the tax-exemption limit and hence, no tax is deducted. No tax deduction will mean that no Form 16 will be issued to you.

If any employer deducts TDS and does not issue a Form 16, he may be liable to pay a penalty of Rs.100 each day, until he issues the certificates, as specified in the Act. This is because any employer who pays salaries and deducts tax at source is compulsorily bound to give its employees a certificate of the tax deducted in the Format of Form 16.

How to get Form 16 for previous years?

To get your Form 16 for the previous years, the first step you can take is to try approaching your employer to get it for previous years. As it is generally issued by the employer, he could help you in the matter.

In case you have no contact with the employer, you can download the Form 26AS by logging into your Income Tax Portal with your personal credentials.

Can I get a duplicate Form 16 certificate if I misplace the original one?

Yes, you have to get in touch with your deductor to get the duplicate certificate issued

Can Form 16 be issued manually?

Yes, your employer can hand over the Form to you directly. The employer generally issues it to his employees around a month before the due date of filing the returns. You can ask for the same from your employer within a fiscal year even after you have left the job.

Is Form 16 mandatory for salaried employees?

Yes, a Form 16 is mandatory for all salaried employees whose income lies in the taxable range ie. Above Rs. 2,50,000. If ever there was any TDS deducted by your employer, they need to issue you a Form 16 as per law. In case, your income was below Rs. 2,50,000 which is a non-taxable amount, you might not get a Form 16. If any employer deducts TDS and does not issue the Form, he may be liable to pay a penalty of Rs.100 each day, until he issues the certificates, as specified in the Act.

How to get Form 16 for pensioners?

In case you are a pension holder, you can easily obtain the Form 16 from the bank which pays you the pension. Not only this, if there is a treasury or a pension disbursing officer that pays your pension, you can even request them for it, if your pension falls under the taxable bracket. They are the bodies responsible for collecting TDS of Income Tax if your pension falls in the taxable bracket. The Form 16 will usually contain details of your pension, savings and the total TDS deducted.

If I switched jobs how can I deal with Form 16?

Switching jobs is a very normal phenomenon and you do not have to stress over Form 16 in such conditions. All you have to do is ask all your previous employers (within a year) to issue your Form 16. In this case, you’ll have multiple Form 16 documents, and the tax computation would be made after considering every Form 16 document.

If you cannot contact your previous employer, you can use the payslips received from that employer and that can be used to file the ITR without Form 16.

What is the password of Form 16?

Your Form 16 is always password protected. The form 16 password is the first 5 characters of your PAN Number in Capital letters (uppercase) and your Date of Birth is DDMMYYYY format.

This means if your PAN number is APOPA0456X and Date of Birth is 12 Jan 1995, then your form 16 password is: APOPA12011995