Tired Of Feeling Stressed Out And Confused About Your Taxes?
As A Person Who Gets A Salary, It’s Important To Know What Form 16 Is And What Role It Plays In The Tax Process.
This Important Document Is A Certificate From Your Employer That Shows How Much Tax Was Taken Out Of Your Pay During A Certain Year.
It’s Required For Filing Your Itr And Has All The Important Details About Your Salary And Tax Deductions.
In This Post, We’ll Talk About How Form 16 Affects Your Income Tax And How Important It Is. So, Let’s Get Started And Explain What This Important Tax Document Is All About.
What is Form 16 & What Are Uses Of It?
The Form 16 Is A Very Important Piece Of Information That You Need To Correctly File Your Tax Returns. It Is Given To You By Your Employer On Or Before June 15 Of The Following Year.
It Has All The Important Information About Your Salary And TDS (Tax Deducted At Source) For The Relevant Financial Year. So, If You Have Worked For More Than One Employer Or Have Changed Jobs, Each One Will Send You A Form 16.
But You Won’t Get Form 16 If Your Income For A Given Year Is Less Than Rs. 2,50,000, Which Is The Tax-Free Limit. Get Ready To Dive Into Form 16 And Learn How To Read And Understand This Important Document.
The Importance Of Form 16 In Income TAX Filing
| Importance of Form 16 | Explanation |
|---|---|
| Helps to file ITR | The information contained in this form comes in handy to file ITR. |
| Easy ITR Preparation | It helps taxpayers to prepare their ITR easily without seeking the help of any financial planner or CA. |
| Verification of Tax Deposits | The said certificate helps to verify the deposited tax amount by comparing the same with Form 26AS. |
| Proof of TDS | It serves as proof of TDS. |
| Proof of Income | Form 16 also serves as proof of income. |
| Loan Verification | It is an important document that is used in the verification process while availing of a loan. |
| Required for Onboarding | Several organisations require individuals to submit Form 16 issued by their previous employers as a part of the onboarding process. |
| Visa Checklist | It also serves as a visa checklist and comes in handy while planning a foreign trip. |
Step By Step Process Download Form 16 From Traces
Employers Are The Only Ones Who Can Access The Form 16 Download. Employees Cannot Access The Downloadable Form Via The PAN On The TRACES Website, Despite Common Perception.
Before The End Of The Fiscal Year On May 31st, Every Company Must Give Out These Forms To Its Qualified Workers.
| Steps | Description |
|---|---|
| 1 | Go to the TRACES portal |
| 2 | Log in to the portal with login ID and password |
| 3 | Hover over to the downloads tab |
| 4 | Find Form 16A and open it |
| 5 | Fill in all the required details |
What Are The Requirements For Getting A Form 16?
People Who Get A Salary And Whose Annual Income Is In The Tax Brackets Can Fill Out Form 16.
No Matter What, An Employee Must Give Form 16 To An Employee If He Or She Has Taken Tax Out Of Salary At The Source.
This Form Is Useful For Salaried Workers And Helps Them File An ITR When Their Salary Is Their Only Source Of Income.
What Information Do You Need From Form 16 To File Your Tax Return?
These Things From Form No.16 Are Used To File ITR –
| Category | Description |
|---|---|
| Taxable salary | Salary used to calculate taxable income |
| Exemption on allowance under Section 10 | Exemption allowed on certain allowances under Section 10 of the Income Tax Act |
| Breakup of applicable deductions under Section 16 | Deductions allowed under Section 16 of the Income Tax Act |
| Breakup of applicable deductions under Section 80C | Deductions allowed under Section 80C of the Income Tax Act |
| Profit or loss resulting from housing reporting | Profit or loss resulting from housing reporting made by the employee |
| Income generated from ‘Other Sources’ | Income generated from sources other than salary, used to calculate TDS |
| Total deductions under Section 80C | Total amount of deductions allowed under Section 80C |
| Outstanding refund or tax payable | Refund due or tax payable after calculation of taxable income |
| TAN and PAN of an employer | Tax Deduction and Collection Account Number and Permanent Account Number of the employer |
| PAN of an employee | Permanent Account Number of the employee |
| Taxpayer’s name and address details | Name and address details of the taxpayer |
| Current Assessment Year | Current year for which the return is being filed |
| TDS amount | Tax Deducted at Source amount |
What is Form 16?
Form 16 is a certificate issued by an employer that shows the amount of tax deducted from an employee’s pay during a certain year.
What is the importance of Form 16?
Form 16 is an important document required for filing Income Tax Returns (ITR). It contains important information about the employee’s salary and tax deductions and serves as proof of TDS and income. It is also useful for loan verification, onboarding, and visa requirements.
Who can access Form 16?
Form 16 can only be accessed by the employer and not by the employee.
Who is eligible to receive Form 16?
People who receive a salary and are in the tax brackets are eligible to receive Form 16. The employer must give Form 16 to the employee if he/she has taken tax out of salary at the source.
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