What is Form 16 & How To Download It

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What is Form 16 & How To Download It

Form 16 is the most commonly heard form and if you are a salaried person, you should have received form 16 annually from your employer. In order to file your income tax returns each year, form 16 is the underlying premise that simplifies the return filing procedure.

In this article, we will help you understand your form 16 in detail, how to download it and use it to file your income tax returns.

What is Form 16?

It comes under section 203 of Income Tax Act, 1961 and is a certificate that gives information on the tax deducted at source (TDS) of your annual income. It presents all the details of the tax that is deducted by your employer and paid in advance. In simple terms, Form 16 is the salary or income certificate issued by your employer and contains all the details that will help the taxpayer to file their income tax returns with the income tax department.

Every employer should provide this form to their employees, as form 16 serves as an important proof of the tax paid. For employees who do not fall into the tax bracket, form 16 is not generally issued, as they do not have to pay taxes or file returns.

Understanding Form 16

Form 16, also known as salary TDS certificate has two parts to it. Part A serves as the proof of the tax deducted by the employer and contains all the TDS information. Part B is an annexure that furnishes further details like your total income, tax deductions, tax paid, due to tax and other income if any. Let us look at each part in detail.

Important Components of Form 16

PAN

Permanent Account Number or PAN is a unique alphanumeric code consisting of 10 digits, allocated to the individual tax payer

TAN

Tax Deduction and Collection Account Number that is allocated to every employer to facilitate tax payments to the government

Gross Salary

Total salary paid to the employee including incentives, bonus and more

TDS

Tax Deducted at Source by the employer

Allowance

Allowance disbursed by the employer like HRA (House Rent Allowance), Medical allowance, travel allowance, etc.

Deduction

All deductions made under applicable Section

Total Income

The final income or taxable income after all deductions that is subject to tax

Education Cess

Tax paid towards education development of the nation

 

Form 16 - Part A

  • Basic details like Employee’s name and address, Employer’s name and address
  • PAN – Permanent account number of the employee
  • PAN and TAN (tax deduction account number) of your employer
  • Assessment year – the year in which your tax is calculated from the income earned in the previous year. For example, if the financial year is 2015-16, then the assessment year is 2016-17
  • Period of Employment
  • Details of your Salary – Gross salary, incentives or perks, deductions, net salary
  • Summary of Total income and tax deduction throughout the year

Form 16- Part B

  • Taxable salary of the employee    
  • All the applicable tax deductions and exemptions under Section 80 C (tax saving investments), 80CCC, 80 CCD, 80D ( health insurance premium), 80E (interest on any education loan), 80 G (donations) and others
  • Aggregate of all the deduction amounts reduced from the taxable income
  • Education cess and surcharge tax details
  • Total tax payable and the amount of TDS deducted by the employer
  • Gross total income, which will be the final amount on which your taxes will be calculated
  • Tax Payable or Refund Due

How to Get the Form 16?

The document is typically issued by your employer for the current financial year and reflects the total earnings and income taxes applicable for that financial year. You can download the form from the online website of the Income Tax department as well. This form is available in the PDF format, which can be printed.

How to Download Form 16?

Your employer is responsible for providing you with the form 16. Even if you have left your job, you can get Form 16 from your employer. If for some reason, you don’t have it, you can download it using the following steps:

Step 1 - Visit the Income Tax Department Website - http://www.incometaxindia[dot]gov.in/Pages/tax-services/form-16A-download-deductor.aspx

Step 2 – Log in using your credentials

Step 3 – Go the Downloads Tab

Step 4 – Select the form – Form 16

Step 5 – For individual PANs, select the relevant financial year for which Form 16 is required, Enter your PAN number and click on Add. Click on Go to proceed

Step 5 – Click on Submit to Download Form 16

How to Fill Form 16?

Part A:

  1. Name and Address of the Employer – Employer details
  2. Name and Address of the Employee – Employee details as per company records
  3. PAN of the deductor – Permanent Account Number of the Employer
  4. TAN of the deductor – Tax Deduction and Collection Account Number of the Employers
  5. PAN of the employee – Individual’s PAN number
  6. CIT (TDS) – Income tax commissioner details
  7. Assessment year and period – The relevant financial year
  8. Summary of tax deducted at source – Lists the quarter-wise details of the tax deducted at source along with the corresponding receipt numbers of the TDS

Part B:

  1. Gross Salary – Total Salary without any deductions along with pre-requisites that you receive
  2. Allowance – The several allowances that your employer pays you, like house rent allowance, travel allowance and more.
  3. Income Chargeable under the Head of Salaries – The total income minus all allowances and deductions by the employers
  4. Gross total income – Any other income reported by employee is added, and the final salary amount on which the taxes will be computed is obtained
  5. Deductions under Chapter VI-A – All applicable deductions under Sections 80C, CCC, CCD, D, E, G
  6. Aggregate of Deductions – All deductions are summed up and final amount to deduct arrived at
  7. Total Income – The final income minus all the applicable tax deductions and exemptions is derived here
  8. Tax on Total Income – Final tax amount as per the income tax slabs and rates applied
  9. Education Cess at 3% - Educational tax surcharge added
  10. Tax Payable – Total tax payable
  11. Less Relief – Under Section 89 any reliefs according to furnished details, adjusted here
  12. Tax Payable – Final tax amount that is payable by the employee and deducted as TDS by employer
  13. Verification – Your Signature and consent for the TDS

Form 16 vs. Form 16A

While Form 16 is your salary certificate issued by the employer, Form 16 A is also a TDS certificate that is applicable for TDS on income other than salary. For example, form 16A is taken out by banks when they subtract TDS on the interest earned on any fixed deposits or recurring deposits bank accounts.

It also consists of the same details like Form 16 like your PAN number, TAN details along with income that is earned apart from your salary and the TDS deducted from such income.

Where is Form 16 Used For?

  1. Income Tax Returns - It is primarily used to file income tax returns. Since it contains all information with respect to the income and various tax deductions, it becomes an important source for the individual to file their income tax returns.
  2. Verification Purposes - One can also use Form 16 to verify the TDS deducted by the employer and the actual income tax collected by the Government. Form 26AS presents all the details of the total income tax collected and deposited with the Government. So, TDS deductions that are available in Form 16 and Form 16A can be cross-checked and verified using the actuals in Form 26AS. You can download the Form 26AS from the Income tax department’s online website, by logging in with your credentials.

Both Form 16 and Form 26AS will come in handy when filing your income tax returns. The TDS details in form 16, and the actual amount deposited with the Government in Form 26AS should match.

Most banks and financial institutions use Form 16 as part of their verification process when you apply for a loan of any kind like housing loan, educational loans, etc.

Multiple Form 16

In case you have switched your jobs in a single year, then you would have to obtain multiple form 16’s – one from your current employer and the other from previous employers.

It is recommended to submit your income from previous employment to your new employer so that all information can be assimilated in a single form 16.  However, you would be required to declare your TDS deducted by current and previous employers in your income tax returns and pay tax accordingly.

If you have not disclosed such details, then you would have to file your income tax returns using multiple form 16s. You would have to consider both incomes together and pay tax accordingly.

Conclusion

Form 16 is a very important and useful document. It not just helps you file your income tax returns, but also comes in handy when applying for any loans, term insurance and more. As soon as you receive your form 16 from your employer, make sure to save a copy.

FAQs on Form 16

Q. What is Form 16?

Form 16 is a certificate entitled by an employer to its employees to validate that their TDS has been deducted and deposited with the income tax department.

Q. What are Part A and Part B of Form 16?

The employer needs to generate and download Part A of Form 16 from the TRACES portal. Before issuing the certificate to their employees, the employer needs to authenticate this form to confirm its correctness.

Here, it’s important to understand that the number of times you will change your job in a financial year, your new employer is going to issue a separate Part A of Form 16 for your period of employer in a particular organisation. Some of the important components of Part A of Form 16 are:

  1. Name and address of your employer
  2. PAN and TAN of your employer
  3. Your PAN
  4. Summary of total tax deducted and deposited quarterly on your behalf. It needs to be certified by your employer

Part B of Form 16 is an annexure to Part A. In case you have changed your job in a financial year, you can decide whether you would want Part B Form from both of your employers or only from your last employer. Some of the important components of Part B are:

  1. Your salary’s detailed breakup
  2. Deductions allowed under IT Act (under chapter VIA)
  3. Income Tax Relief under section 89
  4. How to generate Part A?

Following is the step-by-step guide to understand how to generate Part A of Form 16:

Step 1: Enter data required for TRACES Part-A

  • To start with, you simply need to request for the Part A of on TRACES.
  • TRACES will provide you with a link to download the file with Part A of the Form-16.
  • The link will be for a .zip file. You can convert it into .txt file.
  • Next, click on the button with the message "1 - Import from TRACES" and then upload this .txt file. 

Q. How to generate Part B?

Steps of generate part B Form 16:

  1. Start with filling the details in employees Form 16 Part-B in simple excel format.
  2. After that, createOrganisation in the Form 16 software.
  3. Then, import excel format having Form 16 Part-Bdata in to the software.
  4. Select the number of Form16Part-B you want to generate.
  5. Finally, click on the "Generate Form16" button to get Part-B Form16generation.

Q. How do I merge Part A and Part B?

You simply need to install the Form16 Merging Utility to merge TRACES Part-A of form 16 with Part-B of Form-16 and then digitally sign the Form 16.

Q. Can I generate Form 16 with previous employment details?

Please follow the below-enlisted steps to generate Form 16 with your previous employment details:

  1. First of all, navigate to the option of ‘Payroll’, and then go to ‘Admin’ and then ‘Form 16’. Form 16 page will be appeared on your home screen.
  2. Next, click the option of ‘Settings’ under the panel of Current Settings on the page. You will be directed to the Form 16 Options page.
  3. Next, under the section of Part B Configuration, clear the check box next to ‘Show with Previous Employment’.
  4. Finally, click on the ‘Save’ option. You will receive a message on your system screen prompting that your Form 16 is saved successfully.

Q. How do I get the digital signature on Form 16?

Please follow the below-enlisted steps to get digital signature on the Form 16:

  1. Go to ‘Payroll’ and then to ‘Admin’ and then to ‘Form 16’. Form 16 page will appear on the system screen.
  2. Under the option of ‘Part A’ section, click on ‘upload Part A’.
  3. Next, follow the wizard to generate Form 16.
  4. Now, under the SIGN section (of Part B and part A), go to the link to download Digital Signer.
  5. Double-click on Form16 Digital Signer.exe to open the utility.
  6. Next, enter your credentials in the login window.
    Now, enter the eToken as the prompt given on your screen.
  7. Select the signatory's name in the utility from the drop-down list.
  8. Click on the refresh symbol and then select the name of the signatory from the drop-down list.
  9. Click on the option of ‘Reload Batches’ to refresh the utility software when the latest Part B gets uploaded. The utility software automatically uploads the files and then signs them and then finally downloads them back.

Q. Can I use digital signature with a PFX file?

Yes, you can use USB or .pfx file to receive digital signature.

Q. Can I create Form 16 for zero tax employees?

Form 16 is a basically a TDS certificate. If an employee has zero tax liability, there is no need to generate Form 16 for that employee. However, one can still get Part A of Form 16 for zero tax. 

Q. How do I generate Form 16?

Go to the Form 16 Options page following the navigation of ‘Payroll’ to ‘Admin’ to ‘Form 16’. On the right-hand corner, you will get the option of ‘Settings’. Click on the ‘Settings’ option to proceed. 

Q. How to disable or enable Form 16’s front page?

Please follow the below-enlisted steps to disable or enable the front page of Form 16:

  1. Go to the option of ‘Payroll’, then ‘Admin’ and then ‘Form 16’. You will be redirected to the page of ‘Form 16’.
  2. Select the ‘Settings’ option in the panel of ‘Current Settings’ on the page. You will be again redirected to the ‘Form 16 Options’ page.
  3. Form 16 Generation option, click on the check box next to ‘Show Form 16 Cover Page’.
  4. Next, click on Save. A message will appear on the screen prompting you that Form 16 Option is saved successfully.

Q. How to enable the default view of the digital signature?

Follow the given steps to enable the default view of the digital signature:

  1. Go to the ‘Payroll’ option, then to ‘Admin’ and then ‘Form 16’. You will get the page of ‘Form 16’.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.
  3. Form 16 Generation section will let you select the check box next to Use default appearance for the digital signature.
  4. Finally, click on ‘Save’. A message will appear on the screen which will prompt you that Form 16 Option is successfully saved. 

Q. How to create Form 16 for the employees who have already resigned?

The process for resigned employees will be same as of the regular employees.

Q. How to validate the form 16 signature if it’s showing invalid?

You can easily validate the digital signature if you have already installed CA on Microsoft Certificate Store. As another option, you can also add the Root Certificate of the signing certificate by yourself.

Q. How can prerequisite components be mapped to Form 12BA?

Follow the below steps to modify or view the mapping:

  1. Go to ‘System Settings’, then to ‘Income Tax’, then to ‘Advance’ and then to ‘Form 12BA Mapping’. You will be redirected to ‘Form 12BA Mapping’ page.
  2. Finally, click on ‘Save’. A message will appear on the screen stating that your data is successfully saved. 

Q. How to create Form 12BA and Form 16 together?

Follow the given steps to generate Form 12 BA along with Form 16:

  1. Go to the option of ‘Payroll’ and then to ‘Admin’ and then to ‘Form 16’. Form 16 page will appear on your system screen.
  2. Select the option of ‘Settings’ in the Current Settings panel. You will be directed to the ‘Form 16 Options’ page.
  3. Form 16 Generation section will let you select the check box next to ‘Form 12A’.
  4. Finally, click on ‘Save’. A message will appear on the screen stating that Form 16 Option is successfully saved.  

Q. How to verify if digital signature is already installed or not?

You can check for the certificates in your system’s browser to confirm this.

Q. How can be digital signature of Form 16 default appearance be enabled?

Follow the given steps to enable the default appearance on the form 16:

  1. Go to the option of ‘Payroll’ and then to ‘Admin’ and then to ‘Form 16’. Form 16 page will appear on your system screen.
  2. Select the option of ‘Settings’ in the Current Settings panel. You will be directed to the ‘Form 16 Options’ page.
  • Form 16 Generation section will let you select the check box next to ‘Use default appearance for the digital signature’.
  1. Finally, click on ‘Save’. A message will appear on the screen which will prompt you that Form 16 Option is successfully saved. 

Q. How to update the company details on Form 16?

Follow the given steps to update the company details on form 1:

  1. Go to ‘System Settings’ and then to ‘General’ and then to ‘Company Settings’. You will be redirected to ‘Company Settings’ page.
  2. Update your company name in the field of ‘Company address’.
  • Finally, click on ‘Save’. A message will appear on the screen stating you that the information of your company is successfully saved.

Q. How to verify Form 16?

You can verify your Form16 by using your IT Declaration or IT Statement. Or, you can also refer to Form 26AS online.

Q. How to change the location and date of the digital signature?

TDS circle of your organisation will define the location for your digital signature and e-Token installed during Form 16 generation will automatically confirm the date of digital signature.

Q. How to change the location & date of the generated Form 16?

Follow the given steps to change the location & date of the generated Form 16:

  1. Go to ‘System Settings’, then to ‘Income Tax’ and then to ‘Form 16 Options’. You will be redirected to the ‘Form 16 Options’ page.
  2. Type the location in the ‘Digital Signature’ box where it’ asked to enter the credentials of the person responsible for form 16 section is.
  3. Make sure to select the ‘Use above location’ as the check box for signing location and finally click on ‘Save’.
  4. After following the aforementioned steps, type the date in the ‘Signing date’ box given under the Details section of Form 16. 
  5. Finally, click on ‘Save’. A message will appear on the screen stating you that Form 16 is successfully saved.

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