Form 16 Issuance to Employees

Employers provide their workers with Form 16 as a credential. It confirms that the TDS was taken from the employee of the organization and deposited with the appropriate government authorities.

The salary paid to the employees and the TDS deductions are broken down in detail on Form 16 for your reference. TDS Everything a person needs to prepare and submit their income tax return is contained in Form 16.

Every year, on or before the 15th of June of the year after the financial year in which the tax is deducted, employers must produce a Salary TDS certificate. Form 16 consists of two parts, Part A and Part B. If someone misplaces their Form 16, they might ask their employer for a replacement.

You can handle TDS compliance online with IndiaFilings' assistance. Our TDS specialists will assist you with the completion of all TDS returns, payment of any outstanding TDS deposits, and distribution of Form 16 to the employees.

Structure of Form 16

Part A of Form 16

It gives information about the TDS that is withheld and deposited. Through the TRACES interface, employers can create this form.

The employer must verify the contents before issuing the certificate. Here are a few components of Part A of the salary TDS certificate.

1. Name and address of the employer
2. TAN and PAN of employer
3. PAN of the employee
4. Summary of tax deducted and deposited quarterly, which is certified by the employer.

Part B of Form 16

Part B, which is an annexure to Part A and is created by the company for its employees, offers information on how the salary deductions authorized by Chapter VI-A are broken down. Both employers should obtain Form 16 in the event of a change in employment within one fiscal year. Part B includes, among other things:

1. Detailed breakup of salary
2. Detailed breakup of exempted allowances under Section 10
3. Deductions that are allowed under Income Tax Act (Under Chapter VIA)

Here is the list of deductions

• Deduction for life insurance premium paid, contribution to PPF, etc. under Section 80C
• Deduction for contribution to pension funds under Section 80CC
• Deduction for employee's contribution to a pension scheme under Section 80CCD(1)
• Deduction for taxpayer's self contribution to a notified pension scheme under Section 80CCD(1B)
• Deduction for employer's contribution to a pension scheme under Section 80CCD(2)
• Deduction for health insurance premium paid under Section 80D
• Deduction for interest paid on loan taken for higher education under Section 80E
• Deduction for donations made under Section 80G
• Deduction for interest income on savings account under Section 80TTA

TDS on Salary

The TDS is computed using the specified income tax rates for the fiscal year in which the employee's payment is made. Based on any modifications to the prior deficiency or excess deduction, the tax payer may increase or decrease the amount that is deductible.

The total amount of the TDs will be determined by the following elements:

If a person works for more than one employer during a fiscal year, tax will be withheld from the total salary by the employer that the employee selects by providing information on Form 12B.

Therefore, if an employee has more than one job throughout a financial year, he or she must provide Form 12 B information to each employer. The employer is required to deduct TDS after Form 12B is submitted.

Deposit of Tax to Government by Employers

Every month, on or before the seventh, the employer must submit the tax withheld from the employees' salaries along with an income tax challan ITNS 281.

In recent years, all corporate assessees and assessees who are subject to tax audit have been compelled to pay all TDS online utilizing an internet banking facility starting in 2008.

Tax payments may also be made by an assessee using a different person's account. But the assessee's PAN, for whom the payment is being made, should be listed on the challan for making the payment.

Due Date for Filing TDS Returns by Employers

TDS return must be filed with the Government every quarter as follows:

Annexure-II of TDS Return in May 31st

Employers must include information about the employee, as well as the amounts of TDS deducted and deposited, in the TDS return they submitted on May 31. The business's HR and accountant must carefully prepare Annexure-II of the TDS return because it contains a variety of data elements.

Issuance of Form 16 to Employees

The government would issue TDS certificates to the employer when the employer filed the TDS returns, and the employees would then get these certificates from the employer.

Information on TDS from salary is detailed in Form 16A. Form 16B contains information on TDS. Forms 16A for TDS from sources other than salary, 16C for TDS under Section 194-IB, and 27D for TCS.

Form 16 must be issued no later than June 15 of the fiscal year that comes after the fiscal year in which the tax is deducted. The same Form 16A should be distributed each quarter.