What is Form 16?

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form 16

Form 16 is one of the most crucial aspects of filing income tax returns under the Income Tax Act of 1961. It is needed to provide all the relevant information to the employees of an organization when their income tax is returns are deducted at source. This deduction is also known as tax deduction at source.

Form 16 is a form issued by employers to salaried individuals in India. It contains the information necessary for an employee to understand how tax has been deduced from his/her income. This is essential for filing a tax return with the IT department in India.

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Every employer must provide the Form 16 to their employees, so long as their income is subject to tax. This is because the whole purpose of the form and the return is to give the IT department an account of whose money was deducted, by whom and what exemptions/deductions are claimed by the employee.

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The Form 16 contains the following:

1. Personal details of employee, as well as Permanent Account Number (PAN).
2. Employer’s details, as well as PAN & Tax Deduction and Collection Account Number (TAN).
3. Acknowledgement number of the taxes paid by the employer.
4. Salary details, including perks.
5. Total income and tax deductions.
6. Education cess and surcharge details.
7. Taxes deducted as per sections 191A.
8. Tax payment declaration from employer.
9. Refunds in any to the employee, or balance of taxes payable by the employee.
10. Receipt of TDS.
11. Challan number, cheque number, Demand Draft number of payments made.

Form 16 contains various pieces of crucial information such as the name of the employee, their permanent account number and salary details. It also contains details such as the collection account number of the employer. It is a valid proof that taxes are paid by the employer to the authorized institutions.

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