What Do You Need To Know About FORM 16 Of Income Tax?
Whenever you get your salary in your account, it is received after tax is deducted from it. This is generally done by organizations so that the tax to be paid to the government can be done on a monthly basis to keep an easy track. Form 16 plays an important role in this tax deducted from your salary. A financial year in India is constituted from April 1 of the previous year to the May 31 of the assessment year. Therefore May 31 is the last day when an employee can get his Form 16 issue.
What is Form 16?
Form 16 of Income Tax is a TDS or tax deduction certificate that is issued by an employer when your salary is credited in your account about the TDS is deducted from it. Whenever TDS is deducted from your salary, the income tax of India instructs the employer to issue you the TDS certificate or te Form 16 of Income Tax.
Parts of Form-16 of Income Tax
There are two parts on Form-16. Part A is the TAN or the tax deduction and collection account number of the employer along with the PAN and addresses details of the employee and the employer. I also list the financial year and the time that an employee has spent with the employer. It also has the tax deducted from your salary and the amount credited in your account.
Part B mentions the consolidated detail of your salary paid and the breakup of your salary along with the deduction claimed by you under Section 80 f e Income Tax Act.
When does an employer issue a TDS certificate?
It is issued only when the employer has deducted TDS from your salary. If the employer has deducted TDS and does not issue a TDS certificate, he/she is liable to pay a penalty for the non-issuance of the TDS certificate.