Form 16 of the income tax automatic salary certificate for the financial year 2021-22 with defecation of
the new revised form 16. The Form 16 certificate, also known as the TDS certificate, is a financial
statement issued by a salaried employee’s office that includes earnings, deductions, and “income tax”
or “I-T” paid to the government. This Form-16 Certificate (TDS Certificate) must be issued by your
employer to each employee covered by “Withholding Tax Deduction – TDS” at the end of each
Therefore, All salaried employees must use the Form 16 certificate as a supporting document for IT return to India. If you worked in two different organizations in the same financial year, you will need to submit separate Form 16 certificates from both organizations to file your I-T declaration.
In other words,
Even if your earnings are outside the TDS constraint, you are still eligible to receive the Form 16 document or also known as a TDS certificate upon request. In certain situations, such as obtaining a bank loan for a house or car, etc., the bank may ask you to present a salary certificate and Form 16 as proof of your earnings, deductions and the company’s net income.
For instance, Form 16 Certificate Definition with reference to Department I-T, Gov. of India
Form 16 is a certificate issued to an employee by his officer under section 203 of the Income Tax Act, 1961 for the deduction of withholding tax from income under “Salaries”.
The form 16 certificate must contain details of the withholding tax (TDS) by the company on behalf of the employee.
In addition, Tax deducted at source: TDS is a tax payable on the tax payable against the same income tax paid by a third party taxpayer (employer or official authorized to issue the Form-16 certificate) to the individual. , The withholding tax deduction is the general taxation of income for most countries.
Tax Deductible Account Number: TAN is the authorization number that an employer or officer must obtain from the Income Tax Department before filing TDS. It is the responsibility of the TAN holder to receive TDS from an employee’s salary and pay the same amount of collective tax to the government on behalf of their employee.
In other words, The Central Board of Direct Taxes (CBDT) notified the change in Form No. 16 in the certificate of the source of deduction of the annual salary tax (TDS) issued to employees. Part B of Form 16, which provides details of salary and other income paid, has been amended to provide more details on allowances exempted under Section 10 and allowable deductions as per the Income Tax Act Details required.
However, Exemption under section 10:
In the current format of Part B of Form 16, the employer has the option to mention the nature of the allowances exempted under Section 10 along with the related amounts. In the absence of the disclosure requirement, various employers have issued Form 16 in different formats. Some employers have provided full disclosure, others have collected benefits and disclosed the net amount exempt under Section 10.
In the new Form 16 now notified, employers will have to provide the amount of the benefit in the prescribed fields. Specific areas have been notified for the following benefits:
- Exemption from travel concession u / s 10 (5)
- Exemption from death and retirement allowance under section 10 (10)
- Commuted value of the pension under section 10 (10A)
- Discharge from collection under section 10 (10AA)
- Compensation for renting the house u / s 10 (13A)
The employee must use the Form-16 certificate to file the income tax (IT) return at the end of each financial year.
Form 16 Composition of the certificate (tax certificate)
We will now look at the Form-16 certificate format and what data is specifically shown in the Form 16 format structure:
The first part of the Form-16 format requires primary information about the employer (TDS depositor) and the employee. It should contain the address, designation, PAN, TAN, period of the TDS, year of evaluation, and the approval number of all quarterly TDS details received from the IT department.
The second part of the form 16 template requires details of the salary paid by the employer, the other income declared by the employee and the tax deducted at the source.
The third part of Form 16 shows the details of the tax deducted and filed with the Department of Income Tax, Govt. of India.
Finally, all data reported in this “Form-16” certificate must be certified by the issuing authority with signature, date and office seal.