Understanding Form-16

What is Form 16?

Income Tax Form 16 is a certificate from your employer. It certifies that TDS has been deducted on your salary by the employer. If an employer deducts TDS on salary, he must issue income tax Form 16 as per tax rules of India. Form no 16 is issued once in a year, on or before 31st May of the next year immediately following the financial year in which tax is deducted.

One of the most important income tax form is Form 16. It contain most of the information you need to prepare your income tax return in India. Form 16 has two parts Part A and Part B.

Form 16 Part A has

• Name and address of the employer
• TAN & PAN of employer
• PAN of the employee
• Summary of tax deducted & deposited quarterly, which is certified by the employer
• Assessment Year
• Period of employment with the employer
• Form 16 Part A must be generated and downloaded through Traces portal
• Part A of the Form 16 also has a unique TDS Certificate Number.

Form 16 Part B has

• Detailed breakup of salary paid
• Deductions allowed under the income tax act (under chapter VIA)
• Relief under section 89
• If you have held more than one job during the year, you’ll have more than one Form 16.
• Part B is prepared by the employer manually and issued along with Part A. (Are you an employer? If you are an employer, file your TDS Return here)