Form 16 is among the most important tax forms for employees and employers.
What is Form 16?
It is a permit given to workers by their company as they withhold tax from the employee’s pay. In plain terms, it is an acknowledgement that specifies that your deducted tax has also been deposited with the income tax department.
It is an essential form issued in compliance with the provisions of the Income Tax Act, 1961. It includes specifics of the sum of tax deducted at source (TDS) on the employer’s salary together with the salary for the FY. In brief, it may be assumed that Form 16 is a certificate of evidence of TDS deducted & deposited by the employer.
The Income Tax Act allows the employer carrying TAN to give Form 16 and deduct tax on the employee’s salary. If the tax is not deducted, your employer may decline to provide you with Form 16.
Why is it required?
- It serves as evidence that the government has collected the tax withheld from the employer.
- Help in preparing the income tax return with the IT Department.
- Numerous banks and financial institutions are calling for Form 16 to check the person’s qualifications when requesting for a loan
When is it issued?
It should be provided by 15 June of each year. For the F.Y., for example, 2017-18, the period of issue of Type 16 was 15 June 2018. If an employer refuses or refuses to issue Form 16 by the prescribed date, the employer is responsible for paying a fine of Rs.100 every day until the day from which the failure continues.
As per the process set down by the IT Department, the individual who deducts the tax returns to the government. Therefore, the TDS entries can be modified in the department’s log until the boss has returned the TDS. The last day of the TDS deposition for the month of March is April 30. The TDS return over the last quarter (Jan to March) is expected by 31 May at the latest. Just after TDS return has been filed, it will take 10 to 15 days to represent the entries in the records of the agency. Afterwards, the employer can access the Form-16 and give it to you.