Type 16 is a TDS Certificates issued by the employer deducting the TDS whereas making fee to an worker. As per the Revenue Tax Act, each employer on the time of fee of Salaries shall deduct TDS on the common price of revenue tax computed on the premise of the Revenue Tax Slab Charges in power for that monetary yr during which the fee is made on the estimated revenue of the assessee.
- Advisable Learn: Newest Revenue Tax Slab Charges
The TDS so deducted by the employer is to be deposited with the Revenue Tax division and after depositing the identical, the employer points a TDS Certificates containing all particulars of the tax so deducted and deposited in Type 16. It’s issued by the employer after the top of the yr. As per the Revenue Tax (Sixth Modification Guidelines), the final date for issuance of Type 16 by an employer to his worker is thirty first Could of the following yr.
- Advisable Learn: Computation of TDS on Wage
Solely the TDS Deducted from Wage is mirrored on this type and TDS Deductions from another Revenue are mirrored in Type 16A/ Type 16B.
Elements of Type 16
Type 16 is a quite simple and straightforward to grasp type which states the Wage (and its associated parts) paid by an employer to his worker and the revenue tax deducted thereon.
On the premise of Type 16, a taxpayer can simply file his revenue tax return type with out the assistance of a Chartered Accountant. There are numerous revenue tax return varieties for various class of revenue earners. For taxpayers incomes revenue from Wage and/or Home Property and/or Capital Beneficial properties and/or Different Sources, they will file ITR 1/ ITR 2
- All about ITR 1 efiling on-line
- All about ITR 2 efiling on-line
Type 16 is split into 2 components: Half A & Half B.
Half A of Type 16
Half A of this sort of TDS Certificates consists of particulars like:-
- Title, PAN Card No. & Tackle of the Worker
- Title, PAN No., Tackle & TAN No. of the Employer
- The Evaluation 12 months for which the TDS has been deducted.
- Abstract of Wage paid and the TDS deducted and deposited with the govt..
- Acknowledgement No. of the TDS Fee deposited with Govt.
Half B of Type 16
Half B of this sort of TDS Certificates consists of particulars like:-
- Detailed Wage particulars like Home Lease Allowance, Depart Journey Allowance, Depart Encashment, Gratuity, Pension, Deductions claimed like PPF, Tax Saving FD, Nationwide Saving Certificates and so on
- The Whole Revenue and the Whole Tax on Salaries thereon
- Schooling Cess and Surcharge if any
- Tax Deducted underneath part 192(1A)
- Steadiness Tax payable/tax refundable
This TDS Certificates additionally accommodates a declaration on the finish that the particular person deducting the tax has deposited the identical with the Central Govt. This assertion might both be manually signed or digitally signed. An extract of a specimen copy of Type 16 is proven under:-
Type 16 in case of Job Change
In case you’ve modified your job through the yr, you might be required to gather this kind from each the earlier employer in addition to the brand new employer as you’d be submitting your Revenue Tax Returns on the premise of your Type 16.
Whenever you be part of any new organisation, you need to furnish your TDS particulars from the earlier employer to the brand new employer. You’d even be required to furnish Type 12B to the brand new employer
Furnishing the TDS Particulars issued by the earlier employer would assist the present employer in deducting the tax accordingly. Though furnishing these particulars just isn’t necessary, if you don’t point out these particulars to your present employer, then you might be liable to your self compute the full revenue from each the employers and calculate your tax legal responsibility accordingly. (Solely relevant within the yr of job change)
Advantages of Type 16
- This TDS Certificates accommodates all particulars and particulars of the TDS deducted and deposited. Though a replica of this TDS Certificates just isn’t required to be furnished on the time of submitting of Revenue Tax Return, the small print talked about in Type 16 are required to be furnished within the Revenue Tax Return.
- This TDS Certificates is essentially the most highly effective proof of the Revenue of an Particular person and the truth that the tax has been paid thereon. Banks closely depend on this TDS Certificates to evaluate the Revenue of an Particular person on the time of House Mortgage utility and require any House Mortgage applicant to furnish his Type 16
On-line Verification of Particulars of Type 16
For the good thing about the Tax Payers, a brand new facility has been launched from Monetary 12 months 2011-12 onwards by which a taxpayer can confirm that the small print talked about in his Type 16 are true by logging on to Tax Data Community of the Revenue Tax Division at
This facility is offered from the monetary yr 2011-12 onwards and you’d be required to furnish the TAN No. of the employer, PAN No. of the Worker, Certificates Quantity & the Whole Quantity Deducted. The small print of Type 16 may also be verified from Revenue Tax Type 26AS which may be downloaded on-line
Different Related Factors concerning Type 16
- You probably have not furnished particulars of deductions claimed by you underneath Part 80C, Part 80D, Part 80E, Part 24 and so on., the TDS deducted could also be greater than justified as you didn’t furnish these particulars to your employer. Nonetheless, you’ll be able to nonetheless declare these deductions and declare refund of the surplus TDS deducted on the time of submitting of your revenue tax return.
- If any Skilled Tax has been levied, this may be allowed as a deduction on the time of computation of Revenue Tax and could be accordingly mirrored in Type 16.
- This Type just isn’t required to be connected with the Revenue Tax Return however the Income Tax Officer might ask for it at a later stage.