Understanding Form 16: TDS Certificate for Salary Income

Purpose of Form 16 Form 16 is a TDS certificate issued by employers to employees, detailing the salary income and the TDS deducted. Essential for employees to file their Income Tax Returns (ITR). Issuance Timeline Must be issued by 15th June following the end of the financial year. For FY 2021-22 (AY 2022-23), the due date is 15th June 2022. Update for FY 2020-21 Onwards Part B now includes a section asking, "Whether opting for taxation under Section 115BAC?" to indicate if the employee has chosen the new tax regime with concessional rates but no exemptions/deductions.

Structure of Form 16 Part A: Generated by TRACES, includes details of TDS deducted by the employer. Employer Details: Name, address, PAN, TAN. Employee Details: Name, PAN. Tax Details: TDS deducted and deposited.

Part B: Annexure detailing the income chargeable under the head 'Salary'. Salary Breakdown: Basic salary, perquisites, profits in lieu of salary, and salary from other employers. Allowances under Section 10: LTA, HRA, death-cum-retirement gratuity, commuted value of pension, leave salary encashment. Deductions under Section 16: Standard deduction, entertainment allowance, professional tax.

Importance of Form 16 Simplifies filing of ITR. Ensures accurate reporting of salary income and TDS. Cross-check details with Form 26AS to ensure TDS credits.