Form 16
Easily setup a sole proprietorship with registrations, LEDGERS and business bank account.
Benefits
- Fewer legal formalities than LLP.
- Associated with the GST and income tax departments.
- Full control over the business for the sole proprietor.
- No separate business tax filings.
- Easy to disassemble.
Offers and discounts
Save 18% with GST Registration
Get GST e-invoice with Input Tax Credit
Get Whatsapp Support
Chat with Us for Hassle-Free Tax Solutions!
Get Free Consultation
Get Free Consultation Before Action: Call or Meet Us in Person!
Expert Guidance on What Is Form 16
An employer is responsible for issuing a certificate called ‘Form 16’ to an employee. It details the salary earned during a financial year and the tax deducted at source (TDS) from that salary. Essentially, it is proof that the employer has deducted and paid the tax on behalf of the employee to the government. Remember, this form is important, but not mandatory, for filing income tax returns as it summarises the employee’s earnings and tax deductions and simplifies the calculation of taxable income.
What Is Form 16 Structure?
The employer must issue you Form 16 before 15 June every financial year. It applies to all employers. This form has two parts: Part A and Part B.
Details in Part A
- Employer and employee details
- Period of employment
- TDS deducted and deposited (quarterly)
- Total salary payments for the financial year (quarterly)
- Employer’s declaration
Details in Part B
- Breakdown of basic salary
- Dearness allowance
- House rent allowance
- Deductions like PF contributions
- Details of exemptions claimed under Section 10 (like HRA, conveyance allowance, medical allowance)
- Deductions under Chapter VI-A (like 80C, 80D, etc for life insurance, health insurance and more)
- Computation of taxable income
- Tax payable
- TDS deducted
- Any tax refund due
- Deduction of salary under the Section 80CCC, 80CCD(1), 80CCD(1B), 80CCD(2), 80TTA, Section 89 and more.
A 5-Step Form 16 Download Process
The Form 16 download process should be done via the TRACES website and it helps you verify your details regarding the TDS.
Step 1:
Visit the official website of TRACES which comes under the Income Tax Department of India.
Step 2:
Register, if you are visiting the site for the first time, or log in using your PAN and password.
Step 3:
After a successful login, click the ‘Downloads’ tab and select ‘Form 16.’
Step 4:
Choose the financial year, enter your PAN and other required details and verify them. Finally, submit the form.
Step 5:
Form 16 download will be possible via the ‘Downloads’ tab once the details are submitted successfully. You can further use this form for filing income tax returns.
What is Form 16 Eligibility?
An employer should deduct TDS from an employee’s salary at source if the salary is more than Rs. 2.5 lakhs. Moreover, the employer must issue Form 16 to such an employee within the given time. If the employee does not fit within the tax brackets set, the employer does not issue him the Form 16.
Does a Secure and Smooth Form 16 Download Process Seem Impossible? Let Us Make it Possible
Final Words
An employee is responsible for checking whether all details mentioned in Form 16 are correct after he receives the form from the employer. Moreover, he should reach out to the financial or HR department of the company if mistakes are found in the form. Besides acting as proof of your payment of taxes, Form 16 also helps you apply for loans as some banks and financial institutions ask for it.
FAQs
Can I File Income Tax Returns Without Form 16?
Form 16 is an important document for filing ITR as it simplifies the process. However, it is not mandatory. So, you can file ITR without Form 16.
Do I File ITR If My Employer Does Not Issue Me the Form 16?
Yes, you must file your ITR and pay income tax if your income fits into an income tax slab.
Who Can Use TRACES?
Employers must use TRACES and mention the tax deducted and TDS receipt number. After that, the employer has to download the form and issue it to the employee.
What Is TRACES?
TRACES (TDS Reconciliation Analysis and Correction Enabling System) is an online portal developed by the Income Tax Department of India to streamline the process of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS).
Does Form 16 Have a Password?
Yes, Form 16 is typically password-protected. The most common formats of the password are the first 5 characters of your PAN in lowercase or your date of birth in DDMMYYYY format.
