What is Form 16? – How to Download & Fill Form 16, 16A, 16B for Salaried Employees

Filing your taxes on time is a good indicator of responsibility and accountability. As much as we would all like to be responsible and good citizens of the country, it could be hard to navigate all the different applications, documents, and forms you have to fill out.

Worry not, FlexiLoans has your back! Through this blog, you can learn all the basics about ITR Form 16, both its parts, and why you need to file them.

So, let’s put on our learning hats, and dive into what Form 16 is and what is its use.

What is Form 16?

Form 16 in ITR is like a tax receipt your employer hands you. It’s like a tax certificate issued under Section 203 of the Income Tax Act, 1961, keeping a record of the taxes they deducted from your salary. They’re required to do this, even if you’ve hopped jobs recently or are juggling multiple jobs. If they’re deducting tax money, they have to give you Form 16.

However, if the tax deduction is not necessary, owing to the fact that your annual income for the year is within the exemption limit, your employer might skip this step. They’re supposed to hand over the form by June 15th after the financial year when they deducted the taxes.

Importance of Form 16

Even though Form 16 might seem like just a record of all the income that you lost before you even gained it, having it is more handy than you’d think.

• Primarily and foremost, Form 16 acts as proof of all your income and where you earned it from.
• It also acts as proof that TDS has regularly been deducted from your income, wherever necessary.
• A part of the form also details your income from sources other than salary (such as return on investment, allowances, rent) and any tax imposed on it. A record of such details is also handy to have.
• The process of filing ITR becomes easier with form 16 at hand; enabling you to file it without a CA or a financial planner.
• It is also a significant document that organisations use in the verification process of approving a loan you have applied for.
• It is an important document with respect to filing for a VISA.
• If you’re looking to join a new establishment for a job, your new employer might ask to see this form for verification purposes and compute your future taxes. 
• Having the ITR form 16 will also enable you to check for any mistakes, anomalies or any overpaid taxes in order to claim refunds.

What are Form 16A and 16B?

Form 16 has 2 main components – Form 16A and Form 16B – into which most of your data is bifurcated. Here’s a look at the bifurcation of the details among the 2 parts.

Form 16A:

This part of the form has all the basic information about the employee and the employer, such as:

1. The name of the employee
2. Address of the employee
3. PAN of the employee
4. Name of employer (deductor)
5. Address of employer
6. PAN of employer, etc.

It also contains details of the tax deducted; details like the amount, date of its deposit, challan number and other details of the challan issued by the government, etc.

Form 16B:

This part of Form 16 will contain a detailed account of the computation of your tax in relation to the investment declaration you made at the beginning of the financial year. Any admission of investment also requires submission of proof of the investment. Other components in this form include mention of any allowances your employer has provided you with, house, medical bills, loan EMI, exempted donations, etc. 

• Your gross salary
• Allowances exempt u/s 10
• Tax on employment
• Deductions u/s 80C
• Deductions under other sections (80E, 80G, 80TTA)
• Tax on total income
• Any cess levied 
• Any rebate on tax
• Any surcharges

How to download Form 16, 16A and 16B?

Form 16:

Because it is mandatory for an employer to issue Form 16 if they have any TDS to record, you can just ask them for it. They may issue it for you in print or as a soft copy. If your employer uses any online platform, ask them to guide you through downloading the form. If in case you lose this form, you can request a duplicate copy of the form.

The easiest way to get your hands on this form is by logging into your account on the TRACES portal and downloading the form. Here is how you can do that:

1. Visit the platform and log in with your user ID, password and PAN.
2. Select ‘Form 16’ from the ‘Download’ menu.
3. Select the financial year, quarter, and form types then enter your PAN.
4. Fill in the details of the authorised person.
5. Finish a quick KYC validation.
6. After completing KYC, you will receive a success message. If the message says ‘Available’, you can download Form 16. If the message says ‘Submitted’, however, it means your request is processing and you might have to wait 24-48 hours to be able to download form 16.

However, if that doesn’t work, you can always just ask your financial organisation, tenant, or any other relevant individual to issue you one. 

Form 16B: The buyer of an immovable property must compulsorily issue this form to the seller. If they don’t do it themselves, ask them to. 

Online verification of Form 16:

Whether or not you have a physical copy of the form, you can always verify or validate your TDS by logging into the TRACES portal.

1. Select the option for the taxpayer.
2. Enter the details (User ID, password and PAN).
3. After logging in, select the option of ‘ view / verify tax credit’.
4. Provide details including the TAN (Tax Deduction Account Number) of the deductor and assessment year to either get a provisional certificate or validate if your employer has submitted TDS or not.

As for Form 16B, as a buyer, you can download the form from the TRACES portal or, as a seller, ask your buyer for the form.

To summarise:

Form 16 is like a tax receipt given by your employer, showing taxes deducted from your salary as required by law. It’s vital for tax filing, loan approvals, and visa applications. These forms streamline tax filing and financial transactions, making them a crucial part of your financial record-keeping.

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FAQs:

Q1. What is the eligibility for Form 16?

Ans: If an employer deducts any TDS from the salary of an employee, that employee becomes eligible for Form 16. So, if your salary falls above the tax exemption limit and your employer is deducting the TDS amount from it, you are eligible to receive Form 16 from your employer.

Q2. Is Form 16 mandatory?

Ans: Yes, it is mandatory for every employer to issue Form 16 as long as they are deducting tax from your salary. In case your income is under the exemption level, the employer may not issue the form.

Q3. What happens if I don’t have ITR Form 16?

Ans: ITR Form 16 is an important document to have for every salaried individual. So, not having or filing it has some repercussions. Not having this certificate may make it harder for you to conduct your ITR filing properly. It may also affect your financial activities such as opening a new bank account, applying for a loan, etc. The absence of this document may even make it harder for you to get certain jobs.

Q4. What can I do if there is a mistake in my Form 16?

Ans: If you discover an error in your Form 16, take these steps:

1. Contact Your Employer: Inform your employer or the entity that issued Form 16 about the mistake.
2. Request Correction: Ask for a corrected Form 16 with accurate information. Ensure personal details and income are correct.
3. Check TDS Details: Verify Tax Deducted at Source (TDS) details, especially the deducted amount. Request your employer to rectify TDS errors.
4. Online Correction: If you’ve filed your return, use the online portal to file a revised return for income, deductions, or tax payment corrections.
5. Income Tax Department: Seek assistance from the Income Tax Department if needed.

Maintain records of all communications and documents for reference. Accuracy is crucial for correct tax filing.

Q5. Are Form 16 and ITR the same thing?

Ans: No, Form 16 and Income Tax Return (ITR) are not the same.

Form 16 is a certificate issued by your employer that provides details of the salary you’ve earned during the financial year and the taxes deducted at source (TDS) from your salary. It’s a document that helps you prepare and file your Income Tax Return (ITR).

On the other hand, an Income Tax Return (ITR) is a formal document you submit to the Income Tax Department, disclosing your total income, deductions, and taxes paid during the financial year. It’s a comprehensive tax declaration that taxpayers file to report their income and calculate their final tax liability.

Q6. Can I still file ITR without Form 16?

Ans: Form 16 is certainly an important document to have if you have worked under an employer at any point in time. But filing your ITR is still possible without this Form. Consult your financial advisor and they can guide you as to how you can file your ITR without Form 16.

Q7. Can I generate Form 16 without a PAN number?

Ans: No, you typically cannot generate Form 16 without a PAN (Permanent Account Number) number. Your PAN is a unique identifier for tax purposes in India, and it’s essential for tax-related documentation. Form 16 is a document that includes details of the tax deducted at source (TDS) from your income, and so, it requires your PAN number to be accurately reported.

Q8. If I recently changed jobs, do I still have to get a Form 16 from my previous employer?

Ans: Yes, you need to get a Form 16 from every employer who has deducted any TDS amount from your salary in the financial year. If you have worked under multiple employers within a financial year, you must get and file multiple Form 16 with your ITR.

Q9. Who will issue my Form 16 if I am a pensioner?

Ans: If you are a pensioner, your Form 16 is typically issued by the pension disbursing authority, which is often the organization or government agency responsible for managing and disbursing your pension. In most cases, this could be a government department, a public sector organization, or a financial institution like a bank.

Q10. Does Form 16 help me get a business loan?

Ans: Form 16 serves as a certificate indicating your income and the amount of TDS deducted from it in the financial year. Having Form 16 helps improve your credibility and may help lenders trust you a little more. So, having a Form 16 may help with getting a small business loan. But, with FlexiLoans you can get a business loan with minimal documentation. This means you can access term loans, MSME loans, a line of credit, and various other quick business loans even without a Form 16.