Form 16

Form 16 Issuance to Employees

Employers provide Form 16 certificates to their employees. It verifies that the TDS has been deducted and deposited with the appropriate government authorities on behalf of the organization’s employee.

Form 16 provides a thorough breakdown of the pay given to employees as well as the TDS deducted. TDS Form 16 provides all of the information required to prepare and file an individual’s income tax return.

Employers must produce a Salary TDS certificate on or before June 15th of the following year, immediately after the financial year in which the tax is deducted. Form 16 Part A and Part B are made up of two parts. If a person misplaces his Form 16, he might ask his employer for a duplicate.

TDS compliance may be managed online using SRCC. Our TDS specialists will assist you in filing all TDS returns, paying any late TDS deposits, and distributing Form 16 to workers.

Structure of Form 16
Part A of Form 16

It contains information about the TDS that is deducted and deposited. Employers can create this form using the TRACES portal.

Before granting the certificate, the employer must check the contents. Part A of the pay TDS certificate has a few components.

Employer’s name and address TAN and PAN of the employer Employee’s PAN

The employer certifies a summary of tax deducted and deposited quarterly.

Part B of Form 16

Part B is an annexure to Part A, and it provides information of the pay deductions allowed under Chapter VI-A. It is created by the company for its workers. Both employers should acquire Form 16 in the event of a job change within a financial year. Part B includes the following elements:

Salary breakdown in detail

Exempted allowances under Section 10 Deductions permitted under the Income Tax Act are broken down in detail (Under Chapter VIA)

The following is a list of deductions.

Section 80C allows you to deduct life insurance premiums, PPF contributions, and other expenses.

Section 80CC deduction for contributions to pension funds

Section 80CCD allows for a deduction for an employee’s contribution to a pension plan.

  • Section 80CCD allows for a deduction for a taxpayer’s self-contribution to a notified pension system

(1B) Section 80CCD allows for a deduction for an employer’s contribution to a pension plan.

  • Section 80D deduction for health insurance premiums paid
  • Interest paid on a loan for higher education is deductible under Section 80E.
  • Donations made under Section 80G are eligible for a tax deduction.
  • Section 80TTA allows you to deduct interest earned on a savings account.
TDS on Salary

TDS is computed using the specified income tax rates for the financial year in which the employee’s payment is paid. Based on any modifications in the prior deficiency or excess deduction, an individual responsible for paying the taxes might raise or reduce the amount deducted.

The following factors will determine the overall value of the TDs:

  • If an individual works for more than one employer throughout a fiscal year, tax will be taken from the total salary by one of the employers that the employee chooses by completing Form 12B.
  • If an employee has more than one employer during a fiscal year, he must provide information on Form 12 B to at least one of them. Once Form 12B is submitted, it is the employer’s responsibility to deduct TDS.
Deposit of Tax to Government by Employers

The employer must pay the deducted tax from the employees’ wage, together with an income tax challan ITNS 281, on or before the 7th of every month for the preceding month.

Since 2008, all corporate assesses and tax audited assesses have been obliged to make all TDS payments online using an internet banking facility.

Taxes can also be paid from any other person’s account by an assesses. The PAN of the assesses on whose behalf the payment is made should be indicated on the challan for payment.


Annexure-II of TDS Return in May 31st

Employers must include numerous data about the employee, as well as details of TDS deducted and deposited, in the TDS return they file on May 31st. The TDS return’s Annexure-II contains a variety of data elements that must be carefully completed by the company’s HR and Accountant.

Issuance of Form 16 to Employees

After the employer files TDS returns, the government issues TDS certificates to the employer, which are then given to the employees.

TDS deductions from pay are detailed on Form 16A. TDS information is provided on Form 16B. Form 16C for TDS under Section 194-IB, Form 16A for TDS from other than salary, and Form 27D for TCS (other than pay).

The deadline for submitting Form 16 is on or before June 15th of the financial year following the year in which the tax is deducted. In the case of Form 16A, it should be issued on a quarterly basis.