Form 16 – Basics, Part A & Part B of Form 16

Form 16 is a certificate issued by an employer and it contains the information you need to prepare and file your income tax return.

Employers must issue it every year on or before 15 June of the next year, immediately after the financial year in which the tax is deducted. Form 16 has two components – Part A and Part B. In case you lose your Form 16, you can request for a duplicate from your employer.

Part A of Form 16

An employer can generate and download this part of Form 16 through the TRACES (https://www.tdscpc.gov.in/app/login.xhtml) portal. Prior to issuing the certificate, the employer should authenticate its contents. It is important to note that if you change your job in one financial year, every employer will issue a separate Part A of Form 16, for the period of employment.

Some of the components of Part A are:

a. Name and address of the employer

b.TAN & PAN of employer

c. PAN of the employee

d. Summary of tax deducted & deposited quarterly, which is certified by the employer

Part B of Form 16

Part B of Form 16 is an annexure to Part A. If you change your job in one financial year, then it is for you to decide if you would want Part B of the Form from both the employers or from the last employer. Some of the components of Part B notified newly for the FY 2019-20 are:

a. Detailed breakup of salary

b. Detailed breakup of exempted allowances under section 10

c. Deductions allowed under the income tax act (under chapter VIA):

Specific fields are notified for deductions mentioned below:

1. Deduction for life insurance premium paid, contribution to PPF etc., under section 80C

2. Deduction for contribution to pension funds under section 80CCC

3. Deduction for employee’s contribution to pension scheme under section 80CCD(1)

4. Deduction for taxpayer’s self contribution to notified pension scheme under section 80CCD(1B)

5. Deduction for employer’s contribution to pension scheme under section 80CCD(2)

6. Deduction for health insurance premium paid under section 80D

7. Deduction for interest paid on loan taken for higher education under section 80E

8. Deduction for donations made under section 80G

9. Deduction for interest income on savings account under section 80TTA

d. Relief under section 89

Details required from Form 16 while filing your return

With reference to the image below, here is where you will be able to locate certain information for filing your income tax return for FY 2018-19(AY 2019-20).

1. Allowances exempt under section 10

2. Breakup of deductions under Section 16

3. Taxable Salary

4. Income (or admissible loss) from house property reported by employee offered for TDS

5. Income under the head Other Sources offered for TDS

6. Breakup of Section 80C Deductions

7. Aggregate of Section 80C Deductions(Gross & Deductible Amount)

8. Tax Payable or Refund Due

Additional information, which you will require from your Form 16 while filing your annual return are:

a. TDS Deducted by Employer

b. TAN of Employer

c. PAN of Employer

d. Name and Address of Employer

e. Current Assessment Year

f. Your (Taxpayer’s) Name and Address

g. Your PAN

5 things to know about Form 16

1. Form 16 is a certificate issued by an employer, certifying that the TDS is deducted from the salary of the employee and deposited with the government.

2. The form’s Part A contains employer’s TAN, PAN of employer and employee, address, assessment year, employment period and summary of TDS deposited with government.

3. The Part B of Form 16 consists of salary break-up, details of deductions claimed, total taxable income and tax deducted from the salary.

4. The employer is required to issue Form 16 on or before 31 May of the assessment year. Besides, the employer issues Form 16 if there is a mid-year change of job.

5. Form 16 helps in filing IT returns, is used as proof of income, for loan assessment and sanctioning, attached along with visa application, etc.