What is Form 16?
Form 16 is one of the important workings on filling your income tax.
Form 16 is basically a kind of plan of investment. In layman’s term, Form 16 is the document proof given by an owner to all its employees with the complete details of income (salary), the amount subtracted as income tax (Tax Deduction at Source) for each month and the total tax compensation.
Form 16 is also known TDS certificate. The basic purpose of using Form 16 is for a people’s accuracy while filing online income tax returns. It is very popular because it comes in ease. It provides assesses with its pervasiveness. Note that it is only applicable for people who belong to the salaried class.
According to thinkplaninvest.com, the following are the important points to know about the document:
- Form 16 contains the details of income and the tax deducted.
- It is not compulsory to give the form 16 to the employees if there is no TDS deducted.
- If the company doesn’t have the TAN, then they can not deduct the TDS. In that case, they will not provide the form 16.
- It is employer’s responsibility to issue form 16 if they have deducted tax on your salary.
- Form 16 may be used for applying the home loans. Some of the banks ask for the form 16 as the income proof.
- Form 16A is different from form 16. Form 16a is issued for the TDS other than salary income.
- If the information in the form 16 is wrong, you can correct it.
- It is not compulsory that everyone need form 16, if you are self employed then there is no way for you to get the form 16. In that case, it is very important for you to submit the income tax returns and show that as proof for your income.
- If you are working in a consultancy and not getting the tax deducted by them, you would not get the form 16 too. Don’t need to try getting it, because you can get form 16 only when the tax deducted from your salary.
Form 16 is a very vast topic. To understand the basic thing, just keep this in mind that Form 16 is the foremost important document information in India that is concerned to salaried workers by their respective employers.