Form 16 is provided by employers to salaried individuals in the country. It contains all the information required by the employee at the time of filing his/her income tax returns with the Income Tax Department of India. It is a document that contains all details required to file income tax returns. The employers will need to provide this form to employees at the end of every financial year.
Types of Form 16
The two types of Form-16 are:
- Type-A: This form gives a summary of the tax collected by the employer or organization from the salary of the employee and deposited with the IT Department. This form is on behalf of the employee.
- Type-B: Part-B serves as a consolidated statement that includes details such as salary paid, deductions (if any), and any other income disclosed by the employee or employer.
Eligible for getting 16?
Any individual who is earning a salary and must file tax returns are eligible for Form 16. In case individuals need not file tax returns, they don’t need to submit Form 16. However, employers issue the certificate so that a track of their earnings can be maintained.
Why Form 16 is needed?
It is an important document for the following reasons:
- It works as a proof that your employer has deducted tax from your salary and deposited it with the government
- Helps in the income tax returns filing process
- It is usually requested by banks and financial institutions when you approach them for loans
- It acts as the ‘income from salary’ statement of the individual.
- It helps at the time of filing income tax returns.
- That is a supporting document for the issuance of a visa.
- Acts as proof of income.
- It helps keep a tab on all your tax-saving investments.
- It provides a clear picture of the computation, payment, and refund of your taxes