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How to file income tax return using Form 16? A step by step guide
March, 27th 2023

Form 16/ 16A is the declaration of tax deduction at source provided by the employer on behalf of the employees. Form 16 is released yearly for the preceding fiscal year, generally before the end of May which runs from April 1st to March 31st. It is an important document for salaried employees since it enables them in preparing their income tax returns and claiming any tax refunds that may be available. Based on an interview with different tax experts, here's how tax experts can file an income tax return using Form 16.

 

CA Arpit Jain, Joint MD, Arihant Capital

Form 16 is a certificate issued by an employer in India providing a summary of the salary paid to the employee during the financial year and the tax deducted at source (TDS) on their salary. Form 16 is issued annually, usually by the end of May, for the previous financial year (which runs from April 1st to March 31st). It is an important document for salaried employees as it helps them in filing their income tax returns and claiming tax refunds, if any. 

The Form 16 has two parts: Part A & Part B.

 

  • Form 16-A provides details of TDS deducted and deposited quarterly details of PAN and TAN of the employer and other information.
  • Form 16-B serves as a consolidated statement of the employee’s income and contains details of the breakup of salary and deductions, if any, approved under Chapter VI-A. It is an Annexure to Part A and is prepared by the employer.

You can download the Form 16 from the official website of the Income Tax Department at https://www.incometaxindia.gov.in/Pages/default.aspx, under the Income Tax Forms section.

 

Here’s a step-by-step guide on how to file your income tax using Form 16:

1. You need to first gather all the necessary documents and information including Form 16, copy of your PAN & Aadhaar card, bank statements, and any other relevant documents. Make sure to identify all the deductions you qualify for while filing your taxes (like any deductions under 80C, 80D, etc)

2.  Register on the Income Tax e-filing portal and create an account. If you already have an account, log in.

3. Go to the e-File section and click on "Income Tax Return" to begin the process.

4. Choose the appropriate Income Tax Return (ITR) form based on your income and other factors. If you have Form 16, you can use either ITR-1 or ITR-2.

5. Fill in the required details such as personal information, income details, deductions, and tax payments.

From Form 16, one can locate certain information for filing your income tax return such as

·        Allowances exempt under Section 10,

·        Break up of deductions under Section 16,

·        Taxable salary,

·        Income (or admissible loss) from house property reported by an employee and offered for TDS,

·        Income under the head ‘Other Sources’ offered for TDS,

·        Break up of Section 80C deductions,

·        The aggregate of Section 80C deductions (gross and deductible amount),

·        Tax payable or refund due.

6. Validate all the data entered in the form, and submit.

7. After submitting your return, e-verify it using any of the available options such as Aadhaar OTP etc.

 It’s a smooth online process and can be done in a few minutes.

 

Amar Ranu, Head - investment products & Advisory, Anand Rathi Shares & Stock Brokers

Form 16 is your TDS certificate, which you can obtain from your employer, bank, or other appropriate entity. This certificate details all of your taxable income as well as various tax deductions at the source. Though the structure of Form 16 remains largely unchanged. 

Part A of a Form 16 contains the following information: The Employer's name and address, the Employee's name and address, the Deductor's and Employer's PAN and TAN, the Employee's PAN, and the Employee's PAN. The amount paid or credited, Tax is deducted at the point of sale.

Part B of a Form 16 contains the following information: Salary breakdown, other income declared by the employee to his employer, deductions under Chapter VI A, relief under Section 89, and so on. Tax deducted at source, net income tax payable or refundable.

When you have gathered all of the required documents, such as Form 16, Form 26AS, and others, as well as the final computation of tax liability, you can begin the filing process.

 

Steps to file Form 16

1) Login to the website with your credentials.

2) Go to ‘e-File’ and click on ‘Prepare and submit ITR online’.

3) Select the appropriate Income Tax return Form and assessment year. 

4) Fill in the details as asked and then click the ‘Submit’ button. (there you would request to upload all the required form including Form 16) 

5) Upon successful submission you will see a message displaying ITR submit and processed. 

Following that, you must e-verify your ITR. There are three methods for e-verifying ITR in this manner. If the return is not e-verified, the ITR-V form (password protected) must be printed, signed, and returned to CPC within 120 days of the e-filing date.

 

Babita Rani, Tax consultant

Form 16 is often necessary for all salaried employees to file their ITR. If, however, your employer has never provided you with a Form 16, you might need pay stubs in order to estimate and calculate your gross income.

Although while filing an ITR without Form 16 can be done by employees, it can be time-consuming. An employee must compute the exemption on allowances after determining his or her total compensation using pay stubs. The employee must then disclose all other sources of income, such as real estate and capital gains. The ultimate tax liability must be compared to the TDS amount paid for that financial year after accounting for investments made under Section 80. Employees who have paid less tax than they should have can make the required payment when submitting their ITR online.

Individual taxpayers must file ITR returns by July 31 of each year, although companies and other organisations have different filing deadlines based on their type.

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