What is Form 16?
Every year your employer will issue this document. It is a certificate under section 203 of the Income-Tax Act, 1961, which gives information on the tax deducted at source (TDS) from income chargeable under the head “salaries”. Simply put, it gives details of the tax deducted by the employer. If you have not received your Form 16, you can use the worksheet that the income tax (I-T) department provides to calculate and declare the amount.
Form 16 is useful in filing your income tax return (ITR). What’s inside it? Understanding the content of Form 16 helps you file your I-T returns; you may be able to do it yourself, without help from a chartered accountant or a financial planner, especially if your income comes entirely from your salary, and you have no other source of income.
Click here to download Automatic Master of Form 16Part A & B [ Prepare at a time 50 employees Form 16 Part A & B forthe Financial Year 2017-18 & Ass Year 2018-19]
Main Feature of this Excel Utility :-
Main Input Sheet with Employer's Details Sheet
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Deduction Sheet
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Form 16 Part A & B
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- Automatic Income Tax calculate as per new Tax Slab for F.Y.2017-18
- Prepare at a time 50 employees Form 16 Part B
- Automatic Convert Amount to the In-Words
- More than 1000 Form 16 Part A&B can be prepare by this one Utility.
Form 16 has two sections—part A and part B. Part A consists of your personal details such as your name and address, your employer’s name and address, Permanent Account Number (PAN) of both, the employer’s Tax Deduction Account Number (TAN), and others.
These details help the I-T department track the flow of money from your and your employer’s accounts. Part A also gives details such as the assessment year (AY)—the year in which your tax liability is calculated for the income earned the previous year. For example, for income earned between 1 April 2017 and 31 March 2018, AY will be 2018-19.
This portion of the form also gives details of your period of employment with the current employer. For instance, if in the last financial year, you have worked from 1 April 2017 to 31 March 2018, it will be mentioned in the form. Next, it gives a summary of the TDS by the employer on behalf of the employee.
This is the amount that the employer deducts from your salary as tax periodically and credits it to the I-T department. For instance, if every month your employer deducts Rs.3,000 as tax from your salary, it will be shown in the Form 16 Part A as deposited by your employer to the government. The summary space will be divided based on the periodicity of how your employer credits the tax to the I-T department. Part B of Form 16 is the one that gives most of the details that you need to file I-T return, such as salary paid, other income, tax deducted, and more.
Your gross income is mentioned first. Those who need to pay professional tax should note that the tax is not considered on the gross income. Next, deductions are mentioned.
These include those under sections 80C, 80CCC and 80CCD (contributions towards Public Provident Fund, life insurance policies, pension, among others). Remember, the aggregate amount deductible under these three sections should not exceed Rs.1.5 lakh. And additional exemption Rs. 50,000/- U/s 80CCD(1B) out of the limit of U/s 80C Rs.1.5 Lakh.
Then come the deductions under other sections such as 80D (health insurance premium), 80E (interest on education loan), 80G (donations), and others. The total deductions are reduced from the gross income to arrive at the taxable income.
Tax is calculated on this amount based on the new tax slab for the Financial Year 2017-18. How to use it? Form 16 is one of the documents that you need to keep handy before or while filing your ITR, which has to be done till 31 July. While all deduction related details are mentioned in Form 16.