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Everything about Form 16 in Filing ITR

CA Aman Rajput , Last updated: 13 June 2024  
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Importance of Form 16 in Filing ITR

  • Crucial for Accurate ITR Filing: Form 16 is essential for taxpayers to accurately file their income-tax returns
  • Issued by Employers: Shows tax deducted at source (TDS)
Everything about Form 16 in Filing ITR

Issuance of Form 16

  • As per Rule 31 of the Income-Tax Rules, employers must issue Form 16 by June 15 of the following financial year
  • Example: Form 16 for FY 2023-2024 should be issued by June 15, 2024
  • Section 203 of the Income Tax Act, 1961 mandates employers to provide a certificate stating the deducted tax amount, rate, payment date, salary computation, etc

Structure of Form 16

  • Part A Contains taxpayer and employer details, service period, and tax deducted
  • Part B Contains the Details of tax computation carried out by the employer

Verifying Form 16

  • Verify PAN of employee and employer, and TAN of employer.
  • Ensure Form 16 and Form 26AS contain identical TDS details.
  • Discrepancies due to incorrect PAN can affect tax credit claims.
  • Check salary components, deductions under Section 80C, 80D, etc., and investment proofs.
  • Confirm accurate reflection of relief for salary arrears or section 89 relief, if applicable which means taxes paid after adjustments of previous year as per rates prevailing thereon
  • Approach employer for a revised Form 16 if there are discrepancies in tax-saving deductions and exemptions.
 

Handling Multiple Form 16s

  • Sharing Previous Salary Details: Share previous salary details with the new employer for accurate tax calculation.
  • Combining Details:
  1. Club details of both Form 16s for ITR filing.
  2. Consider combined deductions and exemptions.
  • Total Annual Income:
  1. Combine income from both employers to determine total annual income.

  • Avoid Duplication:
  1. Exemptions and deductions (e.g., HRA, LTA, standard deductions) should not be duplicated.
  2. Deductions must be limited to the threshold for a individual taxpayer
 

Preserving Documents

  • Form 16s and Relevant Documents: Keep both- Form 16s as well as other documents in a file for potential tax queries
  • Form 16 Part B: Employees may ask for Form 16 Part B even even if no tax is deducted, for helping their tax return preparers a smoother tax filing

The author can also be reached at aman.rajput@mail.ca.in for more details

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Published by

CA Aman Rajput
(Chartered Accountant)
Category Income Tax   Report

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