Uses and benefits of Form 16 for Income Tax

• Employee personal details personal details such as name, PAN number, etc.
• Employer details The employer’s details such as name, TAN, PAN, etc.
• Acknowledgment number a verification number of the taxes paid by the employer
• Employee’s Salary details net salary, gross salary, perks, deductions, etc.
• Total income with tax deducted
• Surcharge and Education Cess details
• Tax deducted under section 191A
• The employer’s tax payment declaration
• Details of Refund (if an employee have any) and amount of tax payable (if an employee have to pay)
• TDS paid receipt
• Tax Payment details such as Cheque number, Challan number, Demand Draft number, etc.

Understanding the various components of form 16 will help an employee to file his/her Income Tax Returns accurately.

SECTIONS OF FORM 16

Form 16 comprises of two parts - Part A and Part B

Part A of Form 16 comprises of all the personal details of both employer and employee. It contains the address details and Permanent Account Number (PAN) of both the employer and employee. It also contains the Tax Deduction and Collection Account Number (TAN) of the employer and the TDS filled and paid to the government by him/her. It also comprises of the monthly statement of both employer and employee.

On the other hand, Part B includes consolidated details of an employee such as salary paid, other income, tax paid and tax due. This part also includes the deductions under section 192(1A)

An elaborated components of Part A and Part B of Form 16 is given below in the table

Part A	Part B
Name, address and PAN number of the employee	Salary details such as House rent allowance, leave encashment, leave travel allowance, pension, gratuity and deduction claims – namely tax saving FD, PPF, National saving certificate, etc
Name, address, TAN and PAN number of the employer	Total income of the employee and the tax on the salary
Assessment year of the TDS deducted	Details of Surcharge and Education Cess (If any)
Salary summary, TDS deducted and sent to government	Tax deducted u/s 192(1A)
Acknowledgment number of the deposited TDS.	Tax payable or refundable amount

Online verification of form 16

An individual can verify his / her Form 16 online on TDS Centralised Processing Cell website.

Click ‘Tax Payer’ and select ‘Verify TDS Certificate’ and furnish the details such as

• TAN number of the Deductor
• PAN number of the payer
• TDS certificate number
• Deducted TDS amount
• Select the financial year
• Select income source

Click ‘Validate’ and verify your Form 16.

Difference between Form 16 and Form 16A

The difference between Form 16 and Form 16A are given below

Form 16	Form 16 A
Form 16 is issued by the employer after deducting TDS on salary	Form 16A is issued by the bank after deducting TDS on the income earned from interest.
It is a TDS certificate for salary	It is also a TDS certificate, which is applicable for TDS on income other than salary.
Only TDS deducted by the employer is included in form 16 as wll as 26AS.	Details which are in form 16A are available on Form 26AS.

The difference between Form 16 and Form 26AS.

The difference between Form 16 and Form 26AS are given below

Form 16	Form 26AS
Form 16 is a TDS salary certificate issued by the employer. It certifies that TDS has been deducted from the salary of an employee.	Form 26AS contains the details about the tax deducted and deposited to the Government.
Form 16 can only be downloaded by the deductor.	Form 26AS can be downloaded online by anyone.
Form 16 is a salary TDS certificate.	Form 26AS is a Tax Credit Statement.

Income Tax and its Tax Slab

Income tax is a tax which is levied by the government on the financial income of individuals within their jurisdiction. Every year all individuals must file Income Tax Return to know whether they have any tax liability or they are eligible for any tax refund. And in return of the taxes that the citizens paid, the Government uses the funds to serve public and to improve infrastructure.

There are various rates under which taxes are paid or TDS are deducted from an individual depending on the source of income.

The various tax rate are given below

Income tax slab rates for individual and HUF’S (Below 60 years) for the Financial Year 2017-18

Income Slab	Tax Rate
Income up to Rs. 2,50,000	No tax
2,50,000- 5,00,000	5%
5,00,000- 10,00,000	20%
Above 10,00,000	30%
Surcharge 10% of Income Tax whose total income is above Rs. 50 lakh and below Rupees One Crore. 15% of Income Tax whose total income exceeds Rupees One Crore.
Cess 3% of total income tax and surcharge calculated.

Income tax slab rate for senior citizens ( above 60 and less than 80) for the financial year 2017-18

Income Slab	Tax Rate
Income up to Rs. 300000	No tax
3,00,000- 5,00,000	5%
5,00,000- 10,00,000	20%
Above 10,00,000	30%
Surcharge 10% of Income Tax whose total income is above 50 lakh and below Rs.1crore. 15% of Income Tax whose total income exceeds Rupees One Crore.
Cess 3% of total income tax and surcharge calculated.

Income tax slab rate for super senior citizens (above 80 years) For the financial year 2017- 18

Income Slab	Tax Rate
Income up to Rs. 5,00,000	No tax
5,00,000- 10,00,000	20%
Above 10,00,000	30%
Surcharge 15% of Income Tax whose total income exceeds Rupees One Crore.
Cess 3% of total income tax and surcharge calculated

Income tax slab rate for individuals and HUF’s (below age 60) for the financial year 2016-17

Income Slab	Tax Rate
Income up to Rs. 2,50,000	No tax
2,50,000- 5,00,000	10%
5,00,000- 10,00,000	20%
Above 10,00,000	30%
Surcharge 15% of Income Tax whose total income exceeds Rupees One Crore.
Cess 3% of total income tax and surcharge calculated

Income tax slab rate for senior citizens (both men and women, above 60 and less than 80) for the financial year 2016-17

Income Slab	Tax Rate
Income up to Rs. 300000	No tax
3,00,000- 5,00,000	10%
5,00,000- 10,00,000	20%
Above 10,00,000	30%
Surcharge 15% of Income Tax whose total income exceeds Rupees One Crore.
Cess 3% of total income tax and surcharge calculated

Income tax slab rate for senior citizens (both men and women above 80 years and more ) For the financial year 2016-17

Income Slab	Tax Rate
Income up to Rs. 2,50,000	No tax
Income up to Rs. 5,00,000	No tax
5,00,000- 10,00,000	20%
Above 10,00,000	30%
Surcharge 15% of Income Tax whose total income exceeds Rupees One Crore.
Cess 3% of total income tax and surcharge calculated

Form 16 for individuals who switched job

If an employee has switched to a new job during the same financial year, then he is required to collect Form 16 from both the employers i.e. new employer as well as previous employer as employee would be filing Income Tax Return for that financial year on the basis of the two Form 16s provided by his/her employers. Employees are required to submit Form 12B as per rule, if they are joining the new organization between the years to the new employer.

This form furnishes the details like

• Permanent Account number (PAN) and Tax Deduction and Collection Account Number (TAN) of the previous employer.
• Salary structure or salary slips from the previous organization.
• Deductions under section 80C, 80G, 80E, 80D.
• TDS deducted on salary
• Any professional tax paid by the employee.

Providing the TDS details to the new employer issued by the previous employer will help the new employer to deduct tax accordingly. However, providing these details to the new employer is not mandatory. If you do not provide these details to the new employer then you can compute yourself the total income from both the employers and can calculate the tax liability accordingly.

Procedure to fill form 16

Part- A

• First, fill the employer name and address.
• Now fill the employee name and his designation.
• Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) of the employer.
• Permanent Account number (PAN) of the employee.
• Fill the financial year for which you are filing details.
• Mention the summary of the quarters.

Part- B

• Fill your gross salary i.e. the salary without any deductions.
• Allowances which are received from a company like House Rent allowance, travel allowance, entertainment allowance etc.
• The total income chargeable.
• Calculate gross total income on which tax will be calculated.

Conclusion

To conclude Form 16 is a certificate provided by the employer explaining the income and TDS deducted details of an employee.

Some bullet points, an individual should keep in mind for Form 16 are as follows

• It is divided into 2 parts i.e. Part A and Part B.
• You can verify Form 16 online.
• This form is not required to attached with ITR Form.
• Deductions claimed under section 80C, 80G, 80E, 80D should be furnished otherwise the TDS deducted will be higher.
• If any professional tax is paid by the employee then that would be reflected in Form 16.