Form 16: First-timer? Here's All You Need to Know About it

If you are a salaried employee and filing your Income Tax Return (ITR) for the first time, then you must have heard of Form 16. It is an important document for employees to file their taxes. 

Let's understand what Form 16 is, what all it contains and why it is important.

What is Form 16?

Form-16 is a certificate issued by your employer that provides a detailed summary of the salary paid to you and the tax deducted at source (TDS) during the financial year. It is issued under Section 203 of the Income Tax. It is a detailed breakdown of salary components, tax-exempt allowances and deductions.

What does Form-16 contain?

Form 16 is divided into two parts: Form 16 (A) and Form 16 (B).

Part A contains details like your name and address of the employer, PAN and TAN number, amount of tax deducted and TDS deposited with the government.

Part B contains a detailed breakup of your salary, exemptions under Section 10, deductions under Chapter VI-A and your net taxable income.

What are the deductions allowed under the Income Tax Act under Chapter VI-A?

1. Tax deduction under Section 80C for paid life insurance premiums, PPF contributions, etc.
2. Deduction for Section 80CCC pension fund contributions
3. Deduction for an employee's Section 80CCD(1) pension plan contributions
4. Deduction under Section 80CCD(1B) for the taxpayer's self-contribution to a notified pension plan
5. Deduction under Section 80CCD(2) for an employer's pension plan contribution
6. Deduction for Section 80D health insurance premium payments
7. Interest paid on loans taken out under Section 80E for higher education is deductible.
8. Deduction for donations given in accordance with Section 80G
9. Section 80TTA allows for the deduction of interest income from savings accounts.
10. Section 89 provides relief from taxes, surcharges, and health and education cess charges.

What if you have switched multiple jobs in a financial year?

If you have worked with multiple employers in a financial year, then you have to obtain Form-16 from each of them. The tax has to be deducted at all places. 

Eligibility criteria for Form 16

The TDS is deducted only after the employee's income is taxable. Your income must fall under the taxable bracket to be eligible for Form 16. You don't have to file an Income Tax if your income doesn't exceed the basic exemption limit.

How to download Form 16?

1. Go to the official website of TRACES (TDS Reconciliation Analysis and Correction Enabling System).
2. Log in using your PAN card number and password if you are already registered, and for new users, create an account.
3. Click on the "Downloads" tab and select "Form-16."
4. Choose the type of Form and select the financial year for which you are filing.
5. Verify the details.
6. Choose the TDS date and enter the TDS receipt number.
7. Total the amount of tax collected and deducted.
8. Click "Submit" to download Form-16.

When do you receive Form 16?

The deadline for submitting FY 2024-25 Form 16 is June 15, 2025. Your employer must issue Form 16 by June 15, 2025, at the latest, if TDS has been deducted for FY 2024–2025. Employers who fail to issue Form 16 by the deadline will face a penalty of Rs. 100 per day until they issue it.