Form 16: What It Is, How to Download & File ITR with It?

Introduction

Form 16 is related to income tax and is used by businesses to offer information on tax deductions to their salaried employees. If you’re not sure what Form 16 is, the simplest answer is that it’s a document issued by your company that confirms the pay data earned during a specific year and the amount of TDS deducted. When it comes to taxation, Form 16 is one of the required forms for salaried individuals. It contains all pertinent information about a person’s pay and the total amount of tax deducted by the issuer. This blog includes information on what is Form 16, How to download form 16, and How to file ITR with form 16.

What is Form 16?

Form 16 is an income tax form that organizations use to tell their employees about the taxes deducted. The proof filing of income tax returns by the employer to the government is known as Form 16. If an employee exceeds the limit decided by the government then the employer needs to deduct a certain amount from the employee’s salary as a form of TDS (Tax Deducted at Source). Employees can claim Form 16, from the employer.

Advantages of Form 16

• Helps employee in filing their ITR (Income Tax Return)

Organizations use Form 16 to inform their employees about the taxes deducted from their pay. Form 16 is the proof filing of income tax returns by the employer to the government. Organizations use Form 16 to inform their employees about the taxes deducted from their pay. Form 16 is the proof filing of income tax returns by the employer to the government.

• Helps employee in Computing Tax Liability

Businesses use Form 16 to inform their employees of the taxes that have been deducted from their pay. When an employer deducts an excessive amount from an employee’s salary, Form 16 can be used to file a refund claim for the excess amount deducted.

• At the time of Applying for Credit Card

Form 16 serves as verification of income and a declaration of income tax liability, allowing credit card companies to analyze a consumer’s financial situation. This certificate is used by financial institutions to calculate the borrower’s credit limit. A customer with a high income may be able to obtain a greater credit card limit.

Different parts of Form 16

• Form 16A
• Form 16B

What is Form 16A?

• Form 16A, just like Form 16 is a TDS certificate.
• It is an acknowledgment receipt that states the tax that has been deducted from income other than salary by the employer and the same has been deposited with the Income Tax Department.
• Form 16A is issued when the TDS deduction is made for the income of fixed deposits in the bank or TDS deducted on insurance commission, TDS deducted on your rent receipts, etc.
• Hence, Form 16A is issued when TDS is deducted on any other income you receive that is liable for such deduction.
• Form 16A, just like Form 16 contains the details of deductor and deductee, like name and address, details of PAN and TAN, also the number of TDS deducted and deposited with the government.
• All details that are there in Form 16A are available on Form 26AS.

What is Form 16B?

• Form 16B is a kind of acknowledgment receipt that states that the total amount of tax that has been deducted while purchasing a property and the same amount of deducted tax has been deposited by the seller with the Income Tax Department.
• Form 16B is a form of a certificate, where the seller is certifying details regarding the total TDS deducted in case of a property sale.
• Form 16B verifies the TDS applicable on the sale procedure of the property.

How to download Form 16?

• Visit the income tax department website
• Login to the website
• Go to the download tab
• Select Form 16
• Select the appropriate financial year for which Form 16 is needed
• Enter PAN, click on Add and click on go to proceed
• Click on submit for downloading Form 16

How to file Form 16 with ITR (Income Tax Return)?

• Section 10 of the Income Tax Act exempts certain expenses from being taxed.
• A breakdown of the deductions allowed under Section 16 of the Income Tax Act, as well as the income from home property that is subject to TDS.
• TDS was funded by income from other sources.
• A breakdown of the deductions available under Chapter VI-A of the Income Tax needs to be included
• Net Tax Payable or a refund due

Additional information that is needed of form 16, for filing Income Tax Return

• Employer’s TAN, PAN, Address, and Name of employer’s
• TDS by employee
• Address and Name of a Taxpayer
• PAN of the Taxpayer
• Permanent Assessment Year

Difference between Form 16, Form 16B, and Form 16A

FAQs on Form 16A, Form 16B, Form 16

1.  Is there a deadline for submitting Form 16?

On or before the 15th June of the year immediately following the Financial Year in which income tax is deducted, Form 16 is issued to an employee once a year.

2. Is it necessary to file Form 16 with ITR?

Form 16 is one of the most necessary documents for salaried individual to file their income tax return. As Form 16 contains information about the salary earned, house property, other sources of income, deductions, and tax paid or deducted, it is important to read it carefully. It is critical to have your Form 16 on hand before filing your tax return. If you do not have it, you can still complete your income tax return, but you will have to fill in all of the information on the form manually.

3. What is the password for Form 16B (TDS certificate for the purchase of property)?

• Form 16B- TDS certificate is always password protected.
• The password for Form 16B would be the Date of Birth of the buyer in DDMMYYYY format.
• That means if the Date of Birth of the buyer is 13th January 1997, then your password for Form 16B 13011997.

4. What is the password for Form 16A?

• Form 16A is always password protected.
• The password for Form 16A would be the first 5 characters of the PAN number in uppercase i.e. capital letters and  Date of Birth of the employee in DDMMYYYY format.
• That means if your PAN number is BPTRA5997L and the date of birth is 11th November 2000, then your password for Form 16A would be BPTRA11112000.

5. What are the benefits of Form 16 and Form 16A?

The data of TDS and income will help taxpayers at the time of filing for income tax returns and for calculating tax for the income.

6. For which period Form 16A is issued?

Every quarterly Form 16A is been generated, and the due date for Form 16A is every 15th of the month.

Conclusion

At the time of ITR filing, Form 16, Form 16A, and Form 16B are beneficial to the taxpayer (Income Tax Return). Taxpayers who are familiar with Form 16 will be able to recognize its significance and apply it effectively. To avoid any inconsistency when it comes to filing taxes, taxpayers must learn about Form 16 and other forms and utilize them correctly.