Form 16 - How Well Do You Know About Form 16?

Have you just started earning and don't have any idea how to file your taxes? Do you rely on an agent to file your taxes for you? Have you just heard a discussion on Form 16 and want to know what that is?

It is always handy to know more about Form 16 and how to use the form to file your tax returns. mymoneykarma saves you the hassle of searching and tells you all you need to know about Form 16.

What is Form 16?

Form 16 is an agglomerate certificate issued by your employer, describing the TDS that has been deducted from your salary along with other information required to file your income tax return. Form 16 is released once a year before June 15th. It has two components - Part A and Part B. In case you misplace or lose your form, you can obtain a duplicate form from your employer. Your company can either issue you a hard copy of the form, or you can download Form 16 from the company website using your login credentials.

Form 16 A

Form 16 A consists of crucial financial identification of the employee and the employer. The information given in Form 16 A includes:

• TAN & PAN of your employer
• Name and address of your employer
• PAN of the employee
• Summary of tax deducted from the employee's salary and deposited quarterly, which is certified by the employer.
  

Your employer issues you a Form 16 by downloading it through the TRACES website. If you have changed jobs more than once in a financial year, each employer will issue their own Form 16. You would need to collate that information when you file your taxes.

Form 16 B

Form 16 B is an annexure to Part A, which specifies the various deductions under the Income Tax Act. It  includes the following information:

• Detailed breakup of your salary
• Deductions allowed under the ITA
• Relief under section 89
  

If you change your job in a financial year, then you need to decide if you want Part B of the Form from both of your employers or just from the previous employer.

Why Do You Need Form 16?

Form 16 is necessary documentation that you need in every walk of life. It is proof of the fact that you diligently pay your income tax regularly.  Apart from this, it is also essential for the following purposes.

• Loans: Most loans, such as home loans and two-wheeler loans, require Form 16 receipts as a part of their documentation.
• Visa processing
• Insurance cover: Many high-end medical and life insurance covers need a copy of your Form 16 for processing your request.
  

How to Get Form 16?

Every employer provides Form 16 to their employees. You can get yours from your employer. Even if you quit your job, your employer is bound to provide it to you. Unfortunately, this income tax Form 16, cannot be downloaded from anywhere.