Form 16 Issuance
For businesses having 1 – 25 employees. Includes TDS Filing for Q4 with Annexure II, Form 16 issuance and ITR-1 filing for employees.
For businesses having 26 – 100 employees. Includes TDS Filing for Q4 with Annexure II, Form 16 issuance and ITR-1 filing for employees.
Form 16 Issued to Employees
Form 16 is a certificate that employers give to their employees. Ensuring that TDS is drawn up and submitted to government officials on behalf of an employee of the organization.
Form 16 provides a detailed summary of employees’ salaries and TDS deductions. TDS Form 16 contains all the information that each person needs to prepare and complete a tax return.
Employers are expected to issue a Salary TDS certificate annually on June 15 or before next year as soon as possible after the tax year. There are two sections of Form 16 Part A and Part B. If a person loses Form 16 he or she may request a copy of the form from the employer.
AK taxes can help you manage TDS compliance online. Our TDS experts will help you complete all TDS refunds and pay any overdue deposits and Form 16 issuance to employees.
Composition of Form 16
Provides details of TDS downloaded and installed. This form can be produced by employers through the TRACES portal.
The employer must verify the contents before issuing the certificate. Here are a few sections of Part A of the TDS salary certificate.
- Name and address of employer
- TAN and PAN of the employer
- Employee PAN
- Summary of quarterly tax deduction tax, approved by the employer.
It is an appendix to Part A, Part B prepared for his employees by the employer and contains particulars of deductions from salary approved under Chapter VI-A. In the event of a change of employment within one financial year, Form 16 must be obtained by both employers. Some of the components of Part B are:
- Detailed division of income
- Detailed classification of exemptions granted under Section 10
- Withdrawals permitted under the Income Tax Act (Under Chapter VIA)
- Withdrawal of life insurance premiums, donation to PPF, etc. under Section 80C
- Withdrawal of pension funds under Section 80CC
- Withdrawal of employee contribution to the pension scheme under Section 80CCD (1)
- Withdrawal of taxpayer’s contribution to a pension scheme notified under Section 80CCD (1B)
- Withdrawal of employer from the pension scheme under Section 80CCD (2)
- The health insurance premium deduction is paid under Section 80D
- Withdrawal of interest paid on loans taken from higher education under Section 80E
- Withdrawal of donations made under Section 80G
- Withdrawal of interest on deductions from savings account under Section 80TTA
TDS is calculated at the income tax rates set for the financial year in which the employee is paid. A person liable to pay taxes may increase or decrease the deduction based on any previous adjustments for deficit or overdue.
If a person is employed by more than one employer during the financial year then the tax will be deducted from the combined income of one of the employers as the employee has been selected by submitting information on Form 12B.
Therefore if an employee has more than one employer in a financial year he or she is required to provide the information in Form 12 B to one of the employers. Once Form 12B has been submitted it becomes the responsibility of the employer to deduct the TDS.
Government Tax Deposit by Employers
Employee tax deduction must be paid to the employer and ITNS 281 income tax on or before the 7th of last month.
More recently, since 2008 all corporate auditors and tax examiners are required to make all TDS payments online through an online banking facility.
The inspector can also pay taxes through anyone else’s account. However, the action challan must indicate the attorney’s PAN payment made on his behalf.
Annexure II of TDS Return on May 31st
In a response to TDS filed by employers on May 31, various job information should be provided to the employer as well as TDS details drawn and included. Annex II II of the TDS return has various data points and should be carefully prepared by the HR and the Business Accountant.
Issuance of Form 16 to employees
After the TDS forms have been submitted by the employer, the Government will issue the employer with TDS certificates – which are issued to employees.
Form 16A provides details about TDS salary. Form 16B provides details of TDS Without salary, Form 16C of TDS under Section 194-IB, Form 16A of TDS from other salary, and Form 27D of TCS.
The deadline for the issuance of Form 16 is 15 June or earlier in the financial year immediately after the tax year. In the case of Form 16A, the same must be issued quarterly.
Frequently Asked Questions
If you are an employer, it is compulsory to issue Form 16 to the employee.
Form 16 is issued to the salaried individuals from their employer when he deducts the tax from the salary of the employee. It is an acknowledgment that states that the deducted tax has been deposited with the Income Tax Department.
Form 16/16A is issued by the employers to the employee within 15 days of filing their fourth-quarter TDS returns.
If the employer fails to provide Form 16 after deducting the TDS then the minimum penalty that the employer will pay is Rs 100 for every day the default continues.
Form 16 can be downloaded from the TRACES portal by the employer before giving it to the employee.
Form 16 can be downloaded from the online website of the Income Tax Department, this document is typically issued by the employer for the current financial year and reflects the total earning and the income taxes that are applicable for the financial year.