What is salary certificate Form 16? Form 16 is a salary certificate which issued U/s 203 of the Income-tax Act which deducts withholding tax (TDS) from the income from 'Salary'. It is issued after deduction of tax by the employer from the salary of an employee and submission to the government. The form 16 salary certificate includes a detailed summary of the amount paid or deposited to the employee as well as the TDS. The Form 16 issued between one financial year in accordance with the provisions of the Income Tax Act (IT Act), usually after completion.
An employee can use Form 16 as a source of information to file his / her Income Tax Return (ITR) and should be kept as backup evidence for TDS.
The Salary Certificate Form 16 is now two parts, Part A and Part B.
What is Part A of Form 16?
Part A of Form 16 contains details of tax deducted at source.
A Part A of Form 16 includes the following:
Name and address of the employer
PAN Employer's PAN (Permanent Account Number) and TAN
Deductions have been made at the summary and source of the amount paid or deposited as mentioned in the case of the employee
What is Part B of Form 16?
This is an addition to Part A of Form 16 that must be issued by the employer.
Form 16 Part B have details of the following:
Detailed salary breakup
Allowance up to the amount exempted under section 10
Deduction is permitted under section VI-A of the Income-tax Act
Relief under section 89(1)
What do you do when you work with one or more employers?
If you work with one employer per year, that employer will issue Form 16 for the entire financial year. It will contain details of tax deducted and deposited for all quarters of the financial year.
If you received salary more than one employer in a financial year, every employer may issue a Form 16 with each of them for the period you were employed. Part B of Form 16 will be issued by every employer or the last employer as per the choice of the taxpayer.
You should also know that if an employer is late in the deadline or does not issue Form 16, you will have to pay a penalty of Rs 100 per day till the default continues. However, the fine should not exceed the amount of tax deducted.
Download Automatic Income Tax Salary Certificate Form 16 Part B in Excel for the Financial Year 2021-22 and Assessment Year 2022-23 as per Budget 2021[This Excel Utility can prepare at a time 50 Employees form 16 Part B]
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