What is Form 16? Who issues it and what is its use, these are the questions that arise in the mind of new employees. When a person joins a company, the company deducts TDS every month by dividing the tax on his annual income by 12. This TDS does not depend on the CTC of the employee. It depends on the taxable salary of the employee. For this, the company receives information from the employee about his investment and income tax exempted expenses and TDS is deducted on the basis of that.
Required for filing ITR
The TDS certificate given by the employer to the employee on completion of the financial year is the same Form-16. It contains details of all taxable income of the employee and various tax deductions at source. Form-16 is one of the most essential documents for filing Income Tax Return (ITR). Tax and investment expert Balwant Jain said that if the employee is late in giving information like his investment and home loan, school fees to the employer, then he can claim for it while filing ITR.
Please give this information to avoid inconvenience
Before issuing Form 16 to the employee, the HR department asks the employee whether they want to go with the old scheme of income tax or with the new scheme, this is only for TDS. At the time of filing ITR, the employee can go to any scheme of his choice. Jain told that if the employee has changed two companies in a year, then he will get two Form-16s from two different employers. Jain said that to avoid any inconvenience, the employee should inform his new employer about the salary he is getting from the old company.
Form-16 has two parts- Part-A and Part-B, Part-A contains details of employer’s name and address, employer’s PAN number, employee’s PAN number, employer’s TAN number, period of employment with the current employer and tax deposited. At the same time, Part-B of Form-16 contains detailed description of salary and allowances exempted under section 10.
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