Income Tax Return: Form 16 is a very useful document. It is used for many financial purposes. Whether it is taking a loan or filing Income Tax Return (ITR), Form 16 is used as the most important paper. If you want, you can use it for many other tasks and can take the biggest advantage. Like Form 16, there is also Form 16A but its work is slightly different.
How to take Form 16
If the company in which you work, if that company deducts TDS on your salary, then it has to give Form 16. This form contains the full account of tax deduction. If the company deducts TCS along with TDS, then it is mentioned in Form 16. Under section 203 it is mandatory for the company to issue Form 16 to its employees. If there is any delay in this, then the employees can ask for Form 16 from the company.
If you leave one company and join another company, then you can take Form 16 from both the companies. Both these forms will be used in filing income tax return. Keep in mind that if your earnings do not come under the purview of income tax, then the company may not issue Form 16. Keep this form handy because with its help you can take advantage of various financial and banking services.
How to use Form 16
Since Form 16 serves as an income proof or statement of your salary, this form can be asked from you for many different purposes. Filing Income Tax Return, Proof of Income, Calculation of Tax, Correction of Tax Addition, Tax Saving Investment, How Much Loan Can I Take or Apply for Loan, Visa Issue If the company has to calculate your tax, then Form 16 comes out as the most important document.
Many types of work can be done with this paper. Are leaving the job and want to know how much tax was deducted by the previous company, whether tax has been deducted in excess of the limit and can use Form 16 for work like income tax refund.
Form 16A different from Form 16
Sometimes people misunderstand Form 16 and Form 16A. You should never make such mistake. Although Form 16A is also a TDS certificate, it is not issued by the companies to the employees. In this form, information about TDS deduction of income source other than salary is given. Suppose you earn from fixed deposits, mutual funds, income from rent, insurance commission etc., then the information related to these TDS is given in Form 16A. Similar information is also given in Form 26A. With the help of this form, you can know in which item, where and how much TDS is deducted.