As per Income Tax Act 1961, Form 16 is a certificate or document that is issued to salaried personnel by his employer. This form contains detailed bifurcation of salary paid and calculations of tax deducted by the employer. In this article we will help you understand contents and structure of Form 16.
From an employee point of view, is an important document as it is proof of salary received and is also a Tax Deduction Certificate. The Basic information a Form 16 includes Name, Address & Permanent Account Number (PAN) of the Employee & Name, address and Tax Deduction Account Number (TAN) of the Employer.
Form 16 is divided in to two parts, i.e. Part A & Part B. Part A is a certificate by the income tax authority which states that tax deducted has been paid by the employer. Part B is called as salary statement which includes details of employee’s income. Employee has to ensure that Form 16 PART A is downloaded from Income Tax website to ensure correct payment of taxes. Details in the Form 16 are used to file income tax returns and hence, every salaried individual must assure that his Form 16 has correct information.
The Form 16 reflects the declarations made by the employee with respect to tax deductions and reporting of any other income apart from salary.
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