Form 16 is one of the most essential documents required for filing ITR. It is essentially a certificate employer issue their employees. It validates the fact that TDS has been deducted and deposited

The last date to file income tax return (ITR) for the financial year 2019-20 is fast approaching. In order to file your income tax return you need some basic documents like PAN Card, Form 16, Interest certificates from banks and post offices, salary slips, tax saving investment proofs etc. 

What is Form 16? 

Form 16 is one of the most essential documents required for filing income tax return. It is essentially a certificate employer issue their employees. It validates the fact that TDS has been deducted and deposited with the authorities on behalf of the employee.  Form 16 is issued by an employer and it contains the information you need to prepare and file your tax return.

Note that Employers must issue it every year on or before 15 June of the next year, immediately after the financial year in which the tax is deducted. However, this year since ITR filing date has been extended to November 30, the date for issuing Form 16 has been relaxed as well. 

Form 16 components:

Form 16 is very essential when you are filing your ITR as this form tell you your total income, taxable income and the TDS deducted from it by the employeer. These details are required when you are filing your ITR. Form 16 has two components – Part A and Part B. In case you lose your Form 16, you can request for a duplicate from your employer. If you change your job in one financial year, every employer will issue a separate Part A of Form 16, for the period of employment.

Components of Part A are:

• Name and address of the employer
• TAN & PAN of employer
• PAN of the employee
• Summary of tax deducted & deposited quarterly, which is certified by the employer.

Part B is an annexure to Part A. If you change your job in one financial year, then it is for you to decide if you would want Part B of the Form from both the employers or from the last employer. 

Components of Part B are:

• Detailed breakup of salary
• Detailed breakup of exempted allowances under section 10
• Deductions allowed under the income tax act

While Form 16 is important for filing income tax return, it does not mean that Form 16 is necessary for filing ITR. If you do not have form 16 then you do not need to worry. You can still file your ITR without Form 16. You just need to follow some simple steps.

Here is a step by step guide to help you file your income tax return without Form 16:

1. Collecting Salary slips: Collect all your monthly salary slips and compute the total salary for the year. In case of any discrepancy, you can also check the amount with the amount credited in your bank statements. Keep in mind that net taxable income includes your PF contribution only, not your employer's. You need to subtract the investments and other benefits from your gross income to find the actual taxable income. 

2. TDS calculation: Refer to Form 26AS which is your tax credit statement to calculate how much tax is deducted. Make sure the tax deducted value in Form 26AS matches the tax deduction mention in your payslips. ITR filing process has been made a little easier and smooth as the new Form 26AS will have most of the information needed to file the ITR. From the current assessment year (AY), the new Form 26AS will include the Statement of Financial Transactions (SFTs) on the taxpayers’ financial transactions as specified, which would help taxpayers to complete the ITR process quickly and correctly.

3. Tax Exemption: If you receive allowances like transport allowance, House Rent Allowance, medical allowance etc. then you can get tax exemption. A standard exemption of Rs 50,000 is available to all individuals irrespective of their income. Any individual who lives in a rented house can also avail tax exemption under section 10. Calculate all your tax exemptions carefully to file accurate ITR.

4. Deductions: If you have made any investment under Section 80C and CCD of the Income Tax Act, you can claim deduction up to Rs 1.5 lakh. Declare all your earnings from rental income, part-time business or interests on fixed deposits as it comes under taxable income. Under Section 80D, the premium paid towards a health insurance policy can be claimed as a tax deduction. Premiums for health insurance for self, spouse & dependent children (family) and parents can be claimed as a deduction. One can claim tax benefits on the interest paid on education loan (Section 80E) & home Loan (Section 24), Donations made to charity (Section 80G).

5. Taxable Income: After doing everything mentioned above all that is left to do it calculate your exact income tax on the net taxable income on the basis of tax slabs mentioned by the government. Double-check everything to make sure your tax paid matches the amount mentioned in Form 26AS. After the calculation, if you find that the amount of tax paid by you is less than the amount mentioned in Form 26AS then you will have to pay the excess amount to the relevant authority. Once you have ensured that the differential amount has been paid and everything matches as per Form 26AS you can then e-file your tax returns safely and successfully without Form 16.