What’s Type 16? | All the things about Type-16: Decoded

We’re aware of the look forward to a doc referred to as Type 16 to be able to file income-tax returns. Ever puzzled what Type 16 actually is and what it tells in regards to the taxpayer?

Let’s speak in regards to the significance of probably the most essential paperwork for taxpayers in India.

First, let’s first perceive… What’s Type 16?

  • A certificates detailing tax deducted at supply by your employer

  • Issued by an employer to its worker underneath Part 203 of the Revenue Tax Act

  • Accommodates all the knowledge you want to be able to file your revenue tax return

What does Type 16 include?

  • Wage particulars

  • Tax already deducted

Principally, it supplies particulars in regards to the wage you will have earned throughout a monetary yr and the quantity of tax that has been deducted by your employer and deposited with the I-T division.

Is it obligatory for employers to situation Type 16?

Sure, it’s obligatory if any tax has been deducted at supply from an worker’s wage

What if an worker has modified jobs in the identical monetary yr?

When you’ve got modified jobs or labored for multiple employer on the identical time throughout a yr, and the tax has been deducted by multiple employer, you can be issued separate Type 16s by these employers.

Now, you need to have seen that each Type 16 has two elements – Half A and Half B. What do these components include?

Half A of Type 16 supplies particulars of the tax deposited within the authorities’s treasury each quarter. It additionally has particulars of your everlasting account quantity, your employer’s tax deduction account quantity, and different such info. Your employer can generate and obtain Half A of Type 16 by means of the TRACES portal.

Contents of Type 16, Half A:

  • Title and deal with of the employer

  • Worker’s Everlasting account quantity (PAN)

  • Employer’s tax deduction account quantity (TAN)

  • Abstract of quarterly tax deducted and deposited

Alternatively, Half B of Type 16 has an in depth break-up of tax computation, gross wage paid or credited, exemption or deduction claimed, and some other revenue declared by you, as an annexure to Half A of Type 16. In brief, it is protected to say it’s the detailed computation of tax on revenue of salaried staff.

Contents of Type 16, Half B:

  • Tax computation

  • Gross wage paid/credited

  • Exemption/deduction claimed

  • Another revenue declared by the worker

Now, let’s not confuse Type 16 with Type 16 A. They aren’t the identical.

Type 16A can also be a TDS Certificates. However whereas Type 16 is just for wage revenue, Type 16A is relevant for tax deducted at supply on revenue aside from wage.

What’s Type 16A?

  • Particulars of TDS on revenue aside from wage

  • All info in Type 16A can also be obtainable on Type 26AS

For instance, Type 16A can be issued to you for tax deducted by a financial institution on the curiosity you’ve got earned on mounted deposits, insurance coverage fee, lease receipts, and many others. All particulars in Type 16A are additionally obtainable on Type 26AS.

So, what occurs if no tax has been deducted at supply? Does the employer nonetheless need to situation Type 16?

If no tax has been deducted, the employer needn’t situation Type 16. Nonetheless, you may nonetheless request your employer to situation Half B of Type 16 to be able to file your tax returns.

What if no tax is deducted?

No, the employer needn’t situation Type 16 if no tax is deducted

However the worker can nonetheless request the employer to situation Half B of Type 16 to be able to file returns.

What must you do in case your employer deducts TDS however doesn’t situation a certificates? Properly, in that occasion, your employer can be liable to pay a fantastic of Rs 100 per day underneath part 272A(2)(g) of the I-T Act, until it points the certificates to you.

What if tax is deducted however Type 16 just isn’t issued?

Employer liable to pay a fantastic of Rs 100 per day for any delay in situation of certificates to worker

Now, in case your employer shut store and didn’t situation you Type 16, does it imply that you simply shouldn’t have to pay tax or file a return?

No, in keeping with Part 139(1), in case your complete revenue in a specific tax interval exceeds the fundamental exemption restrict of Rs 2.5 lakh, you need to file the return of revenue, no matter whether or not Type 16 was issued or not.

No tax if Type 16 just isn’t issued by the employer?

No, anybody incomes greater than the exemption restrict in a tax interval should file returns

Lastly, right here we’ve a couple of essential factors to recollect as a taxpayer.

It is advisable to be certain that all the knowledge declared in Type 16 is true and proper. If any info is discovered to be incorrect, it is best to instantly get in contact together with your employer and get the error rectified. In case Type 16 has not been issued to you, you may request your employer to situation it. You too can examine whether or not or not your employer has deposited your TDS with the federal government by logging into your account on the Revenue Tax portal and downloading Type 26AS.

And, a very powerful of all – even when your employer has not deposited the tax deducted out of your wage into the account of the central authorities in your behalf, the burden of paying the tax is on you, not your employer.

Key factors to recollect:

  • All info in Type 16 ought to be appropriate

  • If there’s any error, get it rectified instantly

  • Request your employer for Type 16 in case it has not been issued

  • Examine on I-T portal if the employer has deposited TDS

  • Burden of paying tax is on you, not in your employer