You must have heard the mention of FORM16 while filing income tax return. But have you ever wondered, what is Form 16, and why it is necessary for the taxpayer? So let us know that, what is Form 16 after all?
What is Form 16
Form-16 is a TDS certificate that enlists all your taxable income and different types of tax deducted at source (TDS). Form 16 is one of the most important documents for filing Income Tax Return (ITR). Form 16 is a certificate issued by an employer to its employees. This form confirms that TDS has been deducted and deposited with the authorities on behalf of the employee.
Form-16 has two parts, Part A and Part B. Form-16 is issued by an employer and contains the information that is required to file your tax return.
What information is there in Part A
The first part of Form 16 contains the name and address of the employer, PAN number of the employer, TAN number of the employer, PAN number of the employee, period of employment with the present employer on quarterly basis details of tax deducted and deposited by the employer. The information as it is certified is included.
If you change your job in one of the financial years, you must decide whether you must obtain Part B of the form from both the employers or from the last employer. Part-B is an annex to Part-A.
What is Part B
In Part B of Form 16, complete details of salary, full details of allowances exempted under section 10 and exemptions availed under Income Tax Act are given.
Form-16 is very important for filing income tax return, but it does not mean that Form 16 is necessary for filing ITR. You can also file your income tax return without Form 16. If you do not have Form-16, then you need not worry. If you lose your Form 16, you can also request a duplicate Form 16 from your employer. If you change your job in a financial year, each employer will issue a separate Part-A of Form-16 for the period of employment.