- Date : 18/01/2018
- Read: 2 mins
If you are a salaried individual paying tax, Form 16 is an important document, provided by your employer for the previous financial year.
By the end of May, your employer will issue Form 16 to you and your fellow employees, if not issued already. Here’s why it is essential you know what it is!
What is Form 16?
Form 16 is an Income Tax form or certificate under section 203 of the Income-Tax Act, 1961, which provides information on the TDS (Tax Deducted at Source) for salaried individuals. In other words, this form contains details of your taxable income, and the tax deducted by your employers for the previous financial year, which in turn helps employees file their income tax returns (ITR).
What to do once you receive
Don’t let the numbers on your Form 16 intimidate you. It entails a summary of your income and tax declaration, which gives your employer an estimate of your taxable income. The deducted tax amount is deposited with the government before 30 April of the next financial year. You can verify this by checking Form 2AS from the TRACES website.
You can also view your Tax Credit Statement (which has been deducted on the payment that has been made), which is linked with you PAN card. The password for the 26AS form would be your date of birth in the DDMMYYYY format.
What to look for?
Ensure the numbers between Form 26A and Form 16 and your PAN number are the same. If they don’t, get these details rectified immediately. You can then claim deductions based on this investment proof at the time of filing tax return.