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What is Form 16?

Form 16 is the certificate of deduction of tax at source and is issued on deduction of tax by the employer on behalf of the employees. This certificate provides details of TDS/TCS for various transactions between the employer and employee. It is mandatory for employers to issue the Form to their employees and it forms a vital document for employees to file their returns. 

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What does Form 16 contain?

When an employer has deducted tax under Section 192 from the employee’s salary then the employer is required to issue TDS certificate in Form 16. The TDS certificate is divided into two parts, Part A and Part B. Part A provides information on the tax that has been deducted, details of the employer and employee, PAN/TAN information and quarterly records of tax deposited with the IT Department. Part B includes details related to the employee’s salary, such as allowances, deductions and rebates. For tax deducted under Section 194P, Part B also includes details on the senior citizen’s pension, interest income as well as any deductions and rebates that may have been allowed. The employer is required to verify the details in both Part A and Part B of the TDS certificate before issuing them to the employee. 

When do employers issue Form 16?

Form 16 is required to be issued by the employer up to 15th June of the financial year immediately following the financial year in which the amount was paid and tax has been deducted. 

What happens when employees have more than one employer?

In case an employee has worked or is currently working with multiple employers in a financial year, each employer is obligated to provide Part A of Form 16 for the duration the employee was employed under them. The employee can choose to receive Part B from either each employer or the last employer.

How can employees access Form 16?

Many taxpayers often wonder whether they can simply log in to the TRACES portal and download Form 16 to ease the ITR filing process. It should be noted that employees themselves cannot access or download Form 16 directly from the TRACES portal. Under the Income Tax Act, the responsibility of generating and issuing Form 16 rests solely with the employer. 

What should employees do till Form 16 is issued?

The last date for filing income tax returns by individual taxpayers in ITR-1 and ITR-2 is July 31 while that for non-audit taxpayers filing ITR-4 is August 31. Since employers generally issue Form 16 by June 15, taxpayers have more than a month to verify their income and tax details before filing their ITR by the July 31 deadline. While waiting for Form 16, employees should gather their pay slips, review tax-saving investment proofs like 80C and 80D receipts and check their IT e-filing portal account. Employees can check TRACES via Form 26AS which will help them to verify that all tax deducted at source has been correctly deposited by the employer.