- Income Tax returns is filed to report annual income from various sources to the Tax department
- The last date to file returns is July 31
- We tell you how to file your income tax returns with Form 16
The tax season is under way and most Indians at this time scramble with paperwork to file income tax returns. Income Tax returns is filed to report annual income from various sources to the Tax department. While most taxpayers are well versed with the forms used in tax filing, many still try to understand the purpose of form 16.
What Is Form 16?
Form-16 is a document under Section 203 of the IT Act, 1961, which gives information about the tax deducted at source (TDS) by an employer. Form 16, which is often referred to as salary certificate, is a document provided by an employer to the employee. It broadly furnishes details such as your gross income, net income, deductions claimed by you, tax liability and tax deducted by the employer during the previous financial year.
Difference between Form-16 and Form-16A
If you are a freelancer or contractual employee, the tax deducted at source by your client or employer is mentioned in Form 16A. Form-16A is the TDS certificate from your employer or client which states your income received from sources other than salary like commissions or payments.
How to get Form 16
Employers issue Form 16 by the end of April every year. These days, most employers send it online with digital signature. In a financial year, if an individual changes job, he has to get Form 16 from both the employers before filing ITR.
Understanding Form 16
Form 16 broadly has two sections – Part A and Part B. Part A is the salary certificate consisting details of an employee including PAN, address, assessment year, summary of tax deductions and the amount paid to the government by the employer. Part B consists of the annexure that details out step by step calculations of gross salary, exemptions claimed, net taxable salary, deductions under 80C to 80U for various investments, amount of tax paid etc indicating the tax amount to be refunded.
Why Form 16 is important
Form 16 is important in filing income tax returns as it shows your total earnings and Income Tax that has been deducted from your salary.It is also a helpful document for verification process during a loan application if your ITR is not filed for the particular assessment year.
How to file tax if Form 16 is not available?
Form 16 is a user-friendly document that helps in filing IT returns. However, it is not mandatory to attach Form 16 while filing ITR. You can file ITR yourself or hand it over to a CA. If you do not have Form 16 / Form 16A, you can file your ITR by accessing Form 26AS online. It has all information about your tax deducted at source. On the e-filing site, one can fill up the tax return form with income details as per bank statement and mention other incomes such as interest on FDs. After calculating the taxable income, one can pay the balance tax amount or claim refund if excess tax has been deducted at source.
(The writer is CEO, BankBazaar.com)
Last Updated 31, Mar 2018, 6:36 PM