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Issue of Form 16

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    Deliverables

    Form 16 Document

    Timeline

    5 Days

    (from receipt of all documents)

    What is Form 16?

    Form 16 is a TDS certificate that shows the salary earned and the TDS deducted from your salary. It is issued by the employer before June 15th of every assessment year i.e., after the end of the financial year in which the income was earned. Note that it is necessary to collect Form 16 from all the employers you have worked with during that year.

    Part A of Form 16

    Part A of Form 16 provides details of TDS deducted and deposited quarterly, details of PAN and TAN of the employer and other information. 
    An employer can generate and download this part of Form 16 through the TRACES (https://www.tdscpc.gov.in/app/login.xhtml) portal. The employer should authenticate the certificate's contents before issuing it.
    It is important to note that if you change your job in one financial year, each employer will issue a separate Part A of Form 16 for the period of employment. Some of the components of Part A are:
    It is important to note that if you change your job in one financial year, each employer will issue a separate Part A of Form 16 for the period of employment. Some of the components of Part A are:
    1. Name and address of the employer
    2. TAN and PAN of employer
    3. PAN of the employee
    4. Quarterly summary of total salary payments for the concerned financial year
    5. Summary of tax deducted and deposited quarterly, which is certified by the employer

    Part B of Form 16

    Part B of Form 16 is an Annexure to Part A. Part B is to be prepared by the employer for its employees and contains details of the breakup of salary and deductions approved under Chapter VI-A.  
    If you change your job in one financial year, you should take Form 16 from all your employers. Some of the components of Part B notified newly are:
    1. Detailed breakup of salary
    2. Detailed breakup of exempted allowances under Section 10
    3. Deductions allowed under the Income Tax Act (under chapter VIA)

    The list of deductions mentioned is as below:

    1. Deduction for life insurance premium paid, contribution to PPF etc., under Section 80C
    2. Deduction for contribution to pension funds under Section 80CCC
    3. Deduction for employee’s contribution to a pension scheme under Section 80CCD(1)
    4. Deduction for taxpayer’s self-contribution  to a notified pension scheme under Section 80CCD(1B)
    5. Deduction for employer’s contribution to a pension scheme under Section 80CCD(2)
    6. Deduction for health insurance premium paid under Section 80D
    7. Deduction for interest paid on loan taken for higher education under Section 80E
    8. Deduction for donations made under Section 80G
    9. Deduction for interest income on savings account under Section 80TTA.
    10. Tax calculated, surcharge, education and heath cess charged, relief under section 89.

    Difference Between Form 16, Form 16A and Form 16B

    Form
    Description
    Who Issues It
    Purpose
    Form 16
    TDS certificate issued by the employer as proof of tax deducted from the employee's salary income.
    Employer
    Proof that tax has been deducted at source from the employee's salary and deposited with the government. Essential for filing income tax returns.
    Form 16A
    TDS certificate issued for income other than salary, such as interest income, insurance commission, or rent receipts.
    Financial Institutions
    Issued when TDS is deducted on non-salary income (e.g., interest on fixed deposits, insurance commission, rent receipts).
    Form 16B
    TDS certificate for property purchase under section 194-IA of the Income Tax Act. The buyer of the property deducts 1% TDS before making the payment to the seller.
    Buyer of Property
    Proof of TDS deduction on property transactions. The buyer furnishes Form 16B to the seller as proof of the tax deduction.

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    FAQs

    TDS certificate in Form 16 is issued when TDS has been deducted. If the employer has deducted no TDS, he may not give you Form 16.

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