What is Form 16 & How to Download Form 16?

Form 16 is a significant document provided by employers in India to their employees,  which serves as proof of income earned and Tax Deductions at Source (TDS) made during a financial year. This document has all the information that is required by the employee at the time of filing their ITRs (Income Tax Returns) under the Income Tax Department of India. Understanding the purpose and process of downloading Form 16 is essential for you to file your income tax returns accurately.

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What is Form 16?

Form 16 is a certificate issued under Section 203 of the Income Tax Act 1961. It outlines the salary income earned by an employee and the taxes deducted from their salary by the employer. It ensures that the employer successfully submits the TDS to the Income Tax Department.

Simply put, Form 16 is a certificate that provides a detailed summary of the following heads in a particular financial year (typically from April to March): 

  • Salary earned by an employee

  • Allowances

  • Deductions

  • Taxes paid on the employee's behalf

The Form 16 serves as evidence of the TDS (Tax Deducted at Source) and other crucial information of your income for filing an Income Tax Return (ITR).

It plays a vital role during the income tax return filing process. It enables you to accurately report your income and deductions and claim eligible tax refunds from the Income Tax Department.

Download Form 16 Here: https://assets1.cleartax-cdn.com/cleartax/images/1655725194_sampleform16.pdf

Features of Form 16

Form 16 is a document issued under the Income Tax Act of India, and it acts as proof of Tax Deduction at Source (TDS) by an employer.

The key features of Form 16 are as follows:

Features Details
Employee Details Includes details of the employee, such as:
  • Address
  • Permanent Account Number (PAN)
  • Employer's Tax Deduction and Collection Account Number (TAN)
Salary Details Provides a comprehensive breakdown of the employee's salary components, which includes the following:
  • Basic salary
  • Allowances
  • Perquisites, etc.
Taxable Income Displays the total income earned and the deductions allowed under various sections of the Income Tax Act
Tax Deducted at Source (TDS) Highlights the amount of tax deducted from the employee's salary by the employer every month
Challan Identification Number (CIN) Mentions the unique identification number of the challan used by the employer to deposit the TDS with the government
Verification and Certification Includes a declaration by the employer certifying the authenticity of the information provided in Form 16
Part B Part B of Form 16 provides a summary of the income earned by the employee and the taxes deducted.
Education Cess It also mentions the education cess or surcharge, if applicable, which is levied on the total tax payable.

Components of Form 16

Form 16, also known as the salary TDS certificate, has two parts:

  • Part A: This section includes details of the employer and the employee, such as their names, addresses, and Permanent Account Number (PAN). It also contains information on the tax deducted and deposited with the government.

  • Part B: Form 16 provides a comprehensive summary of the employee's salary, allowances, deductions, and net taxable income. It also includes information on other sources of income, if any, and tax computations.

Let us learn the particular details about both parts of Form 16 in the next sections.

Points to Remember to Fill Form 16 (Part- A & Part- B)

  • An employer can download Part A and Part B of Form 16 through the TRACES portal

  • If an employee has switched his job in one financial year, he would require Form 16 A for each employer for different periods of employment

  • Both the parts must have the TRACES logo to ensure that they are downloaded from the Income Tax Department portal

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What is Form 16 A?

Part- A of Form 16 comprises details regarding the TDS deducted from salary in every quarter. 

Details of Form 16 A:

  • Employee's Name and Address

  • Employer's Name and Address

  • Employee's Permanent Account Number (PAN)

  • Employer's PAN

  • Employer's Tax Deduction Account Number (TAN)

  • Assessment Year: The year your tax is calculated from the income you 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 Net Income: 

    • Gross salary

    • Incentives/ Perks

    • Deductions

    • Net salary

  • Tax Deduction at Source (TDS) Summary from Employee's Salary: 

    • TDS amount

    • Date of deduction

    • Date of deposit with the government

    • Challan Identification Number (CIN): The unique ID number of the challan used by the employer to deposit the TDS with the government

What is Form 16 B?

Part B of Form 16 is an Annexure to Part A, furnishing details like your salary breakup, tax deductions allowed under Chapter IV A, tax paid, tax dues, and other income, if any.

The details of the Form 16B are to be prepared by the employer for its employees. 

Details of Form 16 B:

  • Employee's Gross Salary Components: 

    • Basic salary

    • House rent allowance

    • Transport allowance

    • Perquisites, etc.

  • Deductions under Chapter VI-A:

    • Exemptions u/ Section 80 C (for investments in specified instruments like Provident Fund, Life Insurance Premium, etc.)

    • Section 80CCD

    • Section 80D (health insurance premium)

    • Section 80E (interest on any education loan)

    • Section 80 G (for donations to specific funds)

  • Total Income: Provides an overview of the income on which taxes are calculated

  • Cess and surcharge details

  • Total tax payable and the amount of TDS deducted by the employer

  • Tax Deducted and Deposited: Summary of the TDS deducted from the employee's salary

  • Verification and Certification: A declaration by the employer certifying the accuracy and authenticity of the information provided in Part B of the form

Important Terms in Form 16

Term Details
Permanent Account Number (PAN) A unique alphanumeric code consisting of 10 digits allocated to every taxpayer
Tax Deduction and Collection Account Number (TAN) It is allocated to every employer to facilitate tax payments to the government.
Tax Deduction at Source (TDS) A summary of the tax deducted at source (TDS) from the employee's salary and deposited with the government
Gross Salary The total salary paid to the employee, including incentives, bonuses, and more
Allowances Allowance disbursed by the employer like HRA (House Rent Allowance), Medical allowance, Travel allowance, etc.
Deductions All tax deductions claimed on your taxable income under applicable Sections of the Income Tax Act, 1961
Total Income The final income or taxable income after all deductions that are subject to tax
Cess & Surcharge A tax on tax levied by the government, which is paid towards various development programmes of the nation

Eligibility Criteria for Form 16

Form 16 is to be filled as per the IT Act, 1961 regulations if the following eligibility conditions are fulfilled:

Conditions of Eligibility Details
Salaried Employee Applicable to individuals who are employed and receive a salary from their employer, as per the following terms:
  • Old Tax Regime: Salary above Rs. 2.5 lakhs annually
  • New Tax Regime: Salary above Rs. 3 lakhs annually
Hence, the employee should fall under the taxable bracket of the tax slab.
Exclusions Form 16 does not apply to the following:
  • Self-employed individuals
  • Individuals who earn income from sources other than salary
Tax Deduction at Source (TDS) An employee's salary must have undergone Tax Deduction at Source (TDS)
Tax Deducted and Deposited by the Employer Form 16 is issued by the employer as proof of the TDS deducted and deposited.
PAN and TAN
  • For Employee: A valid Permanent Account Number (PAN), which is used for tax identification purposes
  • For Employer: Must have a Tax Deduction and Collection Account Number (TAN) issued by the Income Tax Department.

How to Download Form 16 for Salaried Employees?

You can access the Form 16 from the following options:

  1. Your Employer:

    • Issues Form 16 for the current financial year (FY 2022-23) to the employee

    • Your employer is responsible for providing you with Form 16

  2. If You Left the Job: 

    Even if you have left your job, you can reach out to your employer's HR or finance department and request Form 16.

How to Download Form 16 by an Employer?

Only the employer can download the form in the following two ways:

  • E-filing Portal of Income Tax Department

  • TRACES website

These forms are available in fillable or PDF format, which can be printed for access to hard copy.

How to Get Form 16 Online?

The steps to Form 16 download from the Income Tax Department by an employer are as follows:

  1. From the e-filing portal of the Income Tax Department 

    Step 1: Visit the Income Tax Department Website- https://www.incometaxindia.gov.in/Pages/default.aspx

    Step 2: Go to the "Forms/Downloads" section

    Step 3: Click the "Income Tax Forms" tab

    Step 4: Choose the "Form 16" option from the "Frequently Used Forms" section

    Step 5: Select the financial year for which you want to download Form 16.

    Step 6: Select from the appropriate format option of "PDF" or "Fillable Form" available under Form 16

    The form will be downloadable on the next window.

  2. From the TRACES (Tax Deduction and Collection Account Number System) portal

    Step 1: Go to the TRACES website

    Step 2: Click on the 'Login' button.

    Step 3: Enter your PAN number and password.

    Step 4: Click on the 'Downloads' tab.

    Step 5: Select the 'Form 16' option.

    Step 6: Select the financial year for which you want to download Form 16.

    Step 7: Click on the 'Download' button.

What are the Important Points to Check in Form 16?

You should keep the following points in mind once you get Form 16 from your employer:

  • Upon receiving Form 16 from the employer, it is important to check for the accuracy of the filled data.

  • Verify personal details, income amount, and TDS deductions in Form 16.

  • If any information is incorrect, contact the HR/Payroll/Finance department of your organization for correction.

  • The employer will rectify the error by filing a revised TDS return to allocate the correct TDS to your PAN.

  • Once the revised TDS return is processed, you will receive an updated Form 16 from your employer.

Difference Between Form 16, Form 16A, and Form 16B

The important details that differentiate Form 16, Form 16A, and Form 16B are shown below:

S. No. Form 16 Form 16A Form 16B
1. An employer who deducts the Employee's TDS issues it The financial institution that deducts the TDS issues it The respective buyer issues it to the seller for deducting TDS on the sale of any immovable property.
2. It is issued for TDS deducted from the salary It is issued for TDS deducted on other incomes except for salary It is issued for TDS for the sale of any immovable property
3. It applies to salaried individuals only. It is applicable for the incomes earned from interest, commission, dividends, etc. This form is applicable for the income earned by property selling, except for agricultural land
4. This form is issued annually This form is issued quarterly This form is issued per transaction on a property
5. Applicable for Employees in the taxable bracket as per the chosen old tax regime or new tax regime Applicable for individuals having income above the mentioned threshold level Applicable on transactions exceeding Rs. 50 lakhs

What are the Advantages of Form 16?

Form 16 offers several advantages to both employees and employers, some of which are mentioned below:

  • Proof of income: Form 16 can be used for various purposes, such as applying for loans, visas, and passports.

  • Accuracy in filing income tax returns: Form 16 contains all the details required to accurately file your ITR on the e-filing 2.0 portal.

  • Claiming refunds: If the amount of TDS deducted is more than the actual tax liability, the taxpayer can claim a refund. Form 16 is required to support the claim for a refund.

  • Reconciliation of TDS: Form 16 can be used to reconcile the TDS deducted with the amount of TDS mentioned in Form 26AS. This helps to ensure that the TDS has been correctly deposited with the Income Tax Department.

  • Detection of errors: If there are any errors in the TDS deducted, they can be detected by comparing the details in Form 16 with the details in the salary slips.

  • Proof of tax compliance: Form 16 is proof that the taxpayer has complied with the provisions of the Income Tax Act. This can be helpful in case of any scrutiny by the Income Tax Department.

In addition to the above, Form 16 is also a useful document for tracking the employee's salary and deductions over the years. This information can be used for various purposes, such as planning for retirement or applying for higher education loans.

Wrapping It Up!

Form 16 is a very important and useful document. It does not just help 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.

FAQ's

  • What is Form 16 for?

    Form 16 is a certificate issued by employers to their employees in India. It is proof of tax deducted at source (TDS) on the employee's salary. The form contains details of the employee's salary, allowances, deductions, and the amount of TDS deducted.
  • How do I get Form 16 online?

    An employee cannot get Form 16 online directly from the Income Tax Department. However, you can request a copy of Form 16 from your employer or the Income Tax Department. Your employer can download the form through the Income Tax Department or TRACES portal.
  • What is Form 16 for salary?

    Form 16 is a certificate issued by an employer to their employees that details the amount of tax deducted at source (TDS) from their salary during a financial year. It is a mandatory document that must be issued by all employers who deduct TDS from their employees' salaries.
  • How can I download TDS Form 16?

    • An employee can get the TDS Form 16 through the following ways:
      • Your employer is required to provide you with Form 16 for the current financial year (FY).

      • If you have left your job, you can still request Form 16 from your former employer.

      • Most employers now provide Form 16 electronically. You can usually download it from your employer's HR portal or website.

    • An employer can download the TDS Form 16 through the following ways:
      • E-filing 2.0 portal of the Income Tax Department

      • TRACES (Tax Deduction and Collection Account Number System) portal

  • I do not have Form 16. How do I file my return?

    If you do not have Form 16, you can still file your income tax return (ITR) using the following methods:
    • Use your payslips

    • Form 26AS

  • If there is no TDS deducted, is the employer required to issue a Form 16?

    No, the employer is not required to issue a Form 16 if there is no TDS deducted. However, even if the employer has not deducted any TDS, the employee is still required to file their income tax return (ITR) if their income exceeds the basic exemption limit and the employee falls under the taxable income bracket.
  • When does the employer deduct TDS and does not issue a certificate?

    There are a few reasons why an employer might deduct TDS from an employee's salary but not issue a certificate:
    • If the employer has made a mistake in calculating the employee's TDS liability, they may deduct TDS but not issue a certificate.

    • The employer may be trying to avoid paying the TDS to the government.

    • If an employer is facing financial difficulties, they may deduct TDS from their employees' salaries but not be able to pay it to the government.

  • If no Form 16 has been issued to me, does it mean I don't have to pay tax or file a return?

    No, not having a Form 16 does not mean that you do not have to pay tax or file a return. The onus of paying income tax and filing an income tax return (ITR) is on you, even if your employer has not issued you a Form 16.

    It must be noted that the absence of Form 16 does not mean that TDS has not been deducted from your salary.

  • How do I check if TDS is deducted from my salary if I don't have Form 16?

    You can check if TDS has been deducted from your salary by accessing your Form 26AS on the Income Tax Department's website.
  • How to download Form 16 for Previous Years?

    Form 16 for previous years can be downloaded from the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal of the Income Tax Department.
  • Can I download my Form 16 myself?

    No, you cannot download Form 16 yourself. It is issued by your employer and must be provided to you in a physical copy or digital copy. However, you can request a duplicate copy from your employer if you have lost or misplaced the original.
  • Can Form 16 be generated without PAN?

    No, Form 16 cannot be generated without a PAN. The PAN is a mandatory field in Form 16, and it is used to identify the employee and track their tax deductions. If an employee does not have a PAN, they will need to apply for one before their employer can issue Form 16.
  • Who issues Form 16 for pensioners?

    The bank through which a pensioner receives their pension issues Form 16 for them. Their previous employers are not responsible for issuing their Form 16.
  • Can I download Form 16 for salaried employees in PDF format?

    Yes, you can download Form 16 for salaried employees in PDF format from the TRACES website.

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