It’s very straightforward to read and in this guide, we will explain how to fill Form 16. It is separated into two sections, Part A and Part B.

Form 16 Part A:

This section of income tax form 16 applies to the contractor, staff, TDS payment information. It gives quarter-wise descriptions of the tax you have deposited with the state.

How to fill Form 16
  • Employer’s name and address.
  • Employer’s PAN and TAN.
  • Employee’s name and address
  • Employee’s PAN
  • Statement of tax paid by the employer.

Form 16 of Part B:

This segment displays the accurate estimation of wages on the grounds of which tax is measured and deducted by the employer. It provides the breakdown of salaries received by you, different allowances, exemptions (if any) and tax calculations after analysis of all things on the basis of existing tax levies. The specifics alluded to in Part B are as follows.

A. Gross Salary (1):

This portion of Form 16 includes descriptions of the wage as provided for in Section 17(1), perquisites and any money generated in favour of salaries.

B. Exemptions and allowances to be found (2):

Prior to this portion of the form, consolidated details on all exemptions within Section 10 was needed, however with the implementation of a new Form 16, a list of allowances is given and the particulars are needed to be filled out. The list of allowances is as follows.

  • Travel concession or assistance u/s 10 (5).
  • Death-cum-retirement gratuity u/s 10 (10).
  • Commuted value of pension u/s 10 (10A).
  • Cash equivalent of the pay allowance alluded to in section 10 (10AA).
  • House rent allowance u/s 10 (13A).
  • Sum of any exception provided under section 10.

C. Total sum of salary provided by the Employer (3).

This portion of the form measures the total salary obtained, plus allowances as well as other perquisites.

D. Deductions under Section 16 (4).

Budget 2018 declared the standard deduction for transport and medical allowances earned by the employee. A specific column for standard deduction is included in the current type 16. All deduction columns are listed below:

  • The standard deduction under section 16(ia).
  • Entertainment allowance referred to in section 16(ii).
  • Tax on employment under 16(iii).

E. Total amount of the deduction referred to in section 16(5)

F. Income Chargeable underneath the heading “Income from Salaries” (6)

This column displays the net income of the salary following reduction of all allowances and deductions.

G. Some other income stated by the employee in compliance with section 192BB (7)

This column of the form allows the employee to report every other income with evidence of income.

H. Total amount of extra profits recorded by the employee (8)

This column includes a total of all wages received by a non-salary employee.

I. Gross total income (9)

This column of the form displays the total income of employees lessened by deductions but before deduction under Chapter VI-A.

J. Deduction under Chapter VI-A (10):

Previously, there was no distinct set of deductions, and there was a chance to reveal the clause during which the deduction was stated. However, the disclosure of deductions in Form 16 is necessary as per the separate list.

K. Aggregate of the deductible sum referred to in Chapter VI-A (11):

This column measures the sum of the deductions on all parts of Chapter VI-A as stated by the employee.

L. Total taxable income (12):

This column applies to the employee’s taxable salary after calculating the deduction under Chapter VI-A. This is the figure by which the tax is measured.

M. Tax on Total Income  (13).

N. Rebate pursuant to section 87A, where necessary (14).

O. Surcharge, where applicable (15).

P. Health and Education Cess(16).

This column is included in the latest Form 16, as the end of health and education is declared in Budget 2018.

Q. Taxes payable (17).

R. Relief u/s 89(18).

S. Net tax payable  (19).