All about Income Tax New Form 16 for salaried employees| With Automatic Preparation Master of Form 16 for the F.Y.2020-21
All about Income Tax Form 16 for salaried employees.
Form 16 Key features: – If you are a salaried employee of the Government or Private, you will be paid after deducting tax from the employer. So Form 16 is a certificate issued by your employer which includes personal details of the employee including name, permanent account number (PAN), etc., details of your earnings salary, paid perquisites, and details of allowance payments. Deducts taxes and pays to the government. It contains employer details such as name, permanent account number PAN, TAN, etc.
This is the basic document required by the employee to file an income tax return because the same should be indicated in the income tax returns which contain a taxable salary under the heading “Salary” in Form-16.
Form 16 is now divided into 2 parts – Part A and Part B.
Part A contains details of both the employer’s TAN (tax exemption and collection account number) and the PAN (permanent account number) of both the employer and the employee. Names and addresses of employers and employees are also mentioned. It also mentions the year of assessment and provides a summary of income tax from your income and submits it to the government according to the quarterly TDS return filed with the employer. The monthly details of TDS deduction and deposit are also certified.
Part B is an important part of your Form 16 because contains a consolidated statement of salary for the year. In addition to breaking your salary, the details of the exemption claimed by you under Section 80 of the Income Tax Act have been mentioned. Exemptions under Chapter VIA include details of the amount claimed under Section 80D for EPF, PPF, NSC, Life Insurance Premium, or Health Insurance, Section 80G for donations. It shows your total taxable income and the tax deducted on this national income.
Requirement of Form 16 for filing an income tax return: Form 16 is required for filing an income tax return in India because firstly, Form 16 works as an examiner for you to check if your employer has submitted the full amount of TDS he may have. Second, it will enable you to file an income tax return that discloses the exact taxable salary income and various discounts from your salary, such as EPF, Occupational Tax, and TDS.
Employer’s obligation to provide Form 16: – Obligation of the employer to provide Form 16 to all employees within 31st July of the year of supervision (A.Y), if TDS is deducted, in case no TDS is deducted, the employer will give you a Form 16 Cannot issue The 16 for the day through which he delays the issuance of this certificate, also if you are employed under more than one employer per year, each of your employers will provide you a Form 16.
Submitting an income tax return without Form 16: – Even if Form 16 is not issued, you will not be able to avoid the obligation to file an income tax return, so to file an income tax return without Form 16 you need to collect a monthly salary slip and calculate total salary for the year.
Note: The amount deposited in your bank statement is after deducting the source tax but you have to fix the gross salary to report the ITR.
An employee receives various allowances in the form of salary while some allowances such as transport allowance, medical allowance, HRA, etc. are exempt from income tax and the allowance is fully taxable. Therefore, the IT department allows you to deduct deductions from the salary to reach the taxable salary figure.
Since you have not received Form 16 from your employer, you need to verify Form 26 AS to know about the TAN and TDS deducted by your employer.
If you have income other than salary, add up all the income from home property rental income, capital gain from the sale of assets, income from other sources like interest on bank deposit, RD, FD, etc.
Subtract the tax benefit from the above-calculated income such as NSC, LIC, Tuition Fee, PPF, and the payment of principal of the housing loan under Section 80C. Similarly, claims for grants made to charities can be claimed under section 80G, and money paid for premiums of medical insurance policies can be claimed under section 80D.
After adding all the income and reducing the tax benefit, the result will be calculated taxable income. Now, calculate income tax on this taxable income using the IT slab rate for F.Y 2020-21.
You are now ready to file a tax return. You can now go to the online tax filing site to file your income tax return