Form 16

Form 16- Basics

Form 16 is a certificate of Tax Deducted at Source(TDS) from salary. It is issued by an employer and it contains the information which is required to file an Income Tax Return(ITR).

An Employer shall issue Form 16 every year on or before 15th June of the next year, immediately after the financial year in which the tax is deducted. Form 16 has two parts – Part A and Part B.

Part A of Form 16

Form 16 can be generated and downloaded by an employer 16 through the TRACES portal. An employer must authenticate the details of Part A before issuing the certificate. It should be noted that if a person changes his job in one financial year, every employer will issue a separate Part A of Form 16, for the period of employment.

Components of Part A are:

  1. Name and address of the employer
  2. TAN & PAN of employer
  3. PAN of the employee
  4. Details of Tax deducted at Source(TDS) deposited quarterly, which is certified by the employer

Part B of Form 16

Part B is an annexure to Part A of Form 16. If a person changes his job in one financial year, then it is up to the employee to decide whether he wants Part B of Form 16 from both the employers or from the last employer.

Particulars of Form 16 Part B for the FY 2019-20 are:

  • Details of salary. 
  • Details of exempted allowances under section 10 of the Income-tax Act,1961.
  • Deductions allowed under chapter VIA the Income TaxAct,1961 such as:
    1. A life insurance premium paid, contribution to PPF, etc., under section 80C
    2. Contribution to pension funds under section 80CCC
    3. Employee’s contribution to the pension scheme under section 80CCD(1)
    4. Taxpayer’s self contribution to a notified pension scheme under section 80CCD(1B)
    5. Employer’s contribution to the pension scheme under section 80CCD(2)
    6. A health insurance premium paid under section 80D
    7. Interest paid on loan taken for higher education under section 80E
    8. Donations made under section 80G
    9. Interest income on savings account under section 80TTA
  • Relief under section 89 the Income-tax Act,1961.

Details required from Form 16 while filing your return

  1. Allowances that are exempt under section 10 the Income-tax Act,1961.
  2. The breakup of deductions under Section 16 the Income-tax Act,1961.
  3. Taxable Salary
  4. Income or loss from house property.
  5. Income under the head Other Sources.
  6. The breakup of Section 80C Deductions
  7. An aggregate of Section 80C Deductions.
  8. Amount of tax payable or refund due

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

  • TDS Deducted by Employer
  • TAN of Employer
  • PAN of Employer
  • Name and Address of Employer
  • Current Assessment Year
  • Your (Taxpayer’s) Name and Address
  • Your PAN

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