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What is Form 16? How to upload Form 16 while filing Income Tax Return (ITR)

What is Form 16

Form 16 is a certificate that is issued by an employer, and it has all the information that you need to prepare and file your income tax return.

Employers must issue this form every year on or before 15th June, immediately after the tax is deducted. Form 16 has two components. These are part A and part B. If any case loses your form 16, you can request for another duplicate copy of that form from your employer.

Part A of Form 16

An employer can quickly generate and download this part through the TRACES (https://www.tdscpc.gov.in/app/login.xhtml) site. Before issuing all the certificates, the employer should verify its contents. It is essential to keep in mind that if you change your job in one particular financial year, every employer needs to issue one separate Part A of Form 16, for the period of employment.

The components of Part A are:

  1. Full name, permanent and present address of the employer
  2. TAN & PAN card of the employer
  3. PAN number of the employee
  4. Summary of total tax deducted & deposited in one quarter, which must be certified by the employer

Part B of Form 16

Part B of Form 16 is an agreement to Part A. If you need to change your job in one financial year, then it is up to you to decide if you would need Part B of the Form from both the employers or only from the last employer.

Some of the components of Part B that is included newly for the Financial Year 2019-20 are:

  1. Specific breakup amount of your salary
  2. Detailed breakup of excluded allowances under section 10
  3. Deductions allowed under the income tax act (under chapter VIA):

Specific cases are notified for deductions

  1. Deduction for the life insurance premium paid and contribution to the PPF, etc., under section 80C.
  2. Deduction for the contribution to pension funds under section 80CCC.
  3. Deduction for the employee’s contribution to pension schemes under section 80CCD(1).
  4. Deduction due to the taxpayer’s self-contribution to a declared pension scheme under section 80CCD(1B).
  5. Deduction for the employer’s contribution to pension schemes under section 80CCD(2)
  6. Deduction for all types of health insurance premiums paid under section 80D.
  7. Deduction due to interest paid on loans taken for any higher education under section 80E.
  8. Deduction for the donations that have been made under section 80G.
  9. Deduction for the interest income on all types of savings accounts under section 80TTA.

Details required for Form 16 while filing the return

As per the image below, here is where you will be able to find particular information for filing your income tax return for FY 2018-19 (AY 2019-20).

  1. Allowances excluded under section 10.
  2. The breakup of deductions under Section 16
  3. Notified taxable Salary
  4. Income from house property given by the employee offered for TDS.
  5. Income except for the head Other Sources provided for TDS
  6. The breakup of the Section 80C Deductions
  7. The aggregate of the Section 80C Deductions (net Gross & Deductible Amount)
  8. Total tax Payable or Refund Due amount

For the FY 2019-20-Part B of Form 16 had got some changes, the changes are

1. Reporting of allowances exempt under Section 10 –

Earlier, all the exempted allowances used to be clubbed under one heading and companies used to disclose those with the name of the allowance. The new format of Form 16 asks to put the benefits under particular provisions like gratuity, LTA, HRA, etc. They are to be disclosed under specific heading for them, and the balance is to be included in one residual head.

2. Standard Deduction –

The standard deduction of ₹40,000 for salaried individuals was introduced last year for FY 2018-19. Now a separate row for the disclosure has been included in the revised version. The changes have also been made in ITR forms.

3. Income from the previous employer is to be disclosed in a separate row. Earlier, there was no separate disclosure for this and companies used to club this in a different head meant for all other incomes which the employee wishes to report, Sehgal added.

4. Reporting of deductions:

Deductions like tuition fee, insurance premium, donations, NPS, etc. have been categorized separately under respective heads.

5. Earlier where the disclosure of different deductions was termed in a consolidated manner, ranging from 80CCD, 80C, 80G, 80E would now be added to be disclosed separately. These specific disclosures would provide ease to the tax authorities in understanding the various components of income of the taxpayer and thereby, facilitating the conduct of scrutiny more precisely.

If your income falls under the specified tax margins, then it is mandatory for you to pay the tax returns for the upcoming assessment year. Before attempting to fill the returns, you must go through the norms and guidelines of your employer and the income tax. Tax filing is not rocket science, but it, however, needs considerable precision.

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