Understanding Form 16 : HR’s Guide

By Pulse Admin

1) What is Form 16?

Form 16 is a certificate issued by your employer that acts like a salary certificate for a financial year. Form 16 lists the annual salary the company paid you paid an employee and the amount of tax deducted during a particular financial year. It clearly mentions your gross income, net income, deductions claimed by you, tax liability and the tax already deducted by your employer. Form 16 is usually issued in April every year, which also happens to be the end of Financial Year.

2) What is the difference between Form 16 and Form 16A and what do both look like?

Form 16 is the TDS certificate issued by an employer for an employee. Form 16A is the TDS certificate for income received from sources other than salary where a tax deduction is involved. It includes the commissions or payments you might have received as a contract employee or a freelancer, deduction of TDS from Fixed Deposit interest, etc. Any income that you earn, on which a TDS has been deducted, is listed in Form 16A. Both Form 16 and Form 16A are important documents and are required to file your income tax returns without hitches.

3) I changed my job in the middle of a financial year? Do I need to furnish Form 16 from both employers?

Yes. You will have to collect the Form 16 from your existing as well as the previous employer before filing your returns for the financial year. Some companies may ask you to furnish your previous TDS details as a part of the joining formalities. Also, it is mandatory to have the Form 16 of your previous employer to claim the TDS taken by them.

If no tax was deducted by the previous employer, you can request them to send a salary certificate clearly mentioning your gross salary during your stay with the company during that financial year.

Companies usually issue Form 16 once as per law. Also, the Income Tax Department can fine companies if they delay the issuing of Form 16. So, once you have collected the document, keep it safely with you until you furnish a copy to the new employer.

 4) What do I do in case my Form 16 has errors in it, or if some information is missing?

Most salaried taxpayers stash away their Form 16 without a second glance and remember to read it only when it is time to file their tax return. It is a smart practice to check the contents of your Form 16 as soon as you receive it. This will give you enough time to fix errors if any.

The PAN mentioned in the document is very important. If you happen to find an error in your Form 16, especially with the PAN, bring it to your employer’s notice immediately. If the employer has wrongly filed the tax, they will have to rectify it by filing the revised returns of TDS to initiate the credit of the proceeds against the correct PAN. It is also good practice to check your Tax Credit Statement (or Form 26A) online once you get your Form 16 just to confirm that the TDS amounts deducted reflect against your name in the form of tax credit.


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