Form 16 is an annual tax document issued to salaried individuals by employers. This document contains details of income earned by an employee, the tax-saving investments and deductions that were availed as well as any tax deducted at source (TDS) for the applicable Financial Year. These are the key details that the employee needs to file their income tax returns.

Contents of Form 16

Form no. 16 has two parts – Part A and Part B.

Form 16 Part A contains details about the TDS deducted directly from your salary and paid to the government. Part A has the following details

The details of the employee such as name, residential address, and Permanent Account Number (PAN)

Employer details which include the name of the company, Tax Deduction Account Number (TAN), and PAN number

The TDS amount that has been deducted every quarter, as well as details such as the dates of deposit, bank details through which TDS was made, the challan serial number for each transaction, etc.

The tax assessment year

The period of your employment with the employer

Form 16 Part B gives the computation of the tax paid. It is a detailed account of your salaried income, the different components, the deductions, and exemptions claimed, and the final tax paid. It includes –

Gross salary with details of basic salary, dearness allowance, house rent allowance,

Perquisites received provident fund contributions, any other allowances, TDS, professional tax, etc.

Exemptions such as HRA, conveyance allowance, medical allowance, etc.

Any deductions as claimed under Chapter VI A of the Income Tax Act, 1961

Any reliefs

Tax amount paid

Any tax that may be due

Tax refund, if applicable

Types of FORM 16

Form 16A: Form 16A is an income tax document that provides TDS details for income other than salary. For instance, TDS on freelance income, TDS deducted for interest income on FDs from banks, insurance commission, rent, or any other income is reflected in this form. The components of Form 16A are similar to Form 16. You will have your details, PAN, the deductor’s details, PAN, TAN, nature of payment, the amount of TDS, date of TDS, receipt number, etc.

Form 16B: Form 16B is concerned with the sale of a property. Any TDS deducted for property sales is reflected in this form. The buyer of the property must deduct TDS and pay the same to the government. Form 16B will be issued to the seller as proof that the tax has been deposited with the government. Some of the most important components of Form 16B are the seller’s PAN, the tax assessment year, the payment acknowledgment number, etc.

According to the rules of the Income Tax Act, of 1961, all salaried individuals who fall in the taxable bracket have to be issued Form 16 by their employers. This means that any individual who is employed by another person and earns more than Rs. 2,50,000 per year has to be given Form 16. You can request this from your current and previous employers while filing taxes.

Multiple Form 16

If you have received multiple Form 16 documents, each Form 16 Part A is liable to have a different TAN along with different TDS amounts that have been deducted from your salary during the applicable period. So if you have multiple Form 16 documents for a fiscal, you will have to combine the TDS amount on each Form 16 to know the total TDS that you have paid for the applicable financial year.

Similarly, the data contained in Part B of Form 16 will also have to be collated to calculate your total income for the year (from salary/bonus), total tax saving investments made, HRA received/exempt, and so on. Based on this data, you can calculate and verify your total tax liability for the year.

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