FORM 16

Form 16

Finally when i received a mail from my finance team to submit the tax deduction proof for Financial year, I am very much confused where to submit my proofs. Its all because I have to join in other company on the proof submission day. After getting clarifications from my current finance team they advised me to submit my tax deduction proofs to new employer along the Form 16 from the current employer. So what is this Form 16 ?

Form 16:

If you are salaried employee in an organization, then you will get the salary after deducting tax by the employer. This process is called as Tax Deduction at Source(TDS). Every company has to get the TIN. TIN is Tax Identification Number. This number is issued to person who is responsible to deduct Tax on payments made to employees.

At the end of financial year, company must issue a form 16 which contains the details about the salary earned by that employee and how much tax deducted. It will have details on each month. In simple terms Form 16 is details about the tax deducted by the employer in behalf of employee. The same will be paid to government by the company. Many people thing that getting the Form 16 alone is enough for the tax filing. Tax payer has to use the Form 16 to file the IT return every financial year end.

For example, if you have worked in two different companies in the same financial year, he must obtain the two Form 16 to file the IT returns.

Form 16A:

The purpose of the Form 16 and 16A is the same except the issuing person. Form 16 is applicable only to the salaried employee. There is many other areas where TDS can be applicable like deducing the tax for interest earned by your Fixed Deposit in the Bank. Here bank is the person who deducts the tax. For every financial year they must issue a TDS certificate to the customer. They have to fill the Form 16A and hand over to the customer.