What’s Form 16 and how does it help file your returns ?
Date Published: March 23, 2021
A Form 16 is a certificate issued by the employer to its employees for each financial year, under Section 203 of the Income-tax Act, 1961. The format of Form 16 was amended by the tax department this year and was enforced from 12 May 2019. All employers issuing Form 16 after that date were required to adhere to the new rules.
Just like the earlier format, the new format of Form 16 has two sections—part A and B. Part A contains the employee’s personal details such as name and address, the employer’s name and address, the Permanent Account Number (PAN) of the employee and PAN and the Tax Deduction Account Number (TAN) of the employer. It also contains details of the period of employment with your current employer, and details of tax deducted at source (TDS) on your income. Part B has details of income earned during your employment with the employer, total deductions and taxable income. This part also has details of the tax payable or refundable. All these details come handy when you file your tax returns.
However, while earlier Form 16 used to contain the aggregate amount of salary and deduction, in the new format, the employer has to give a break-up of salary components and deductions claimed.
