15 queries about Form 16 answered and its impact on tax filing

With the Income Tax filing season in full swing, a lot of salaried tax payers, especially the new tax payers, have lot of questions about interpreting Form 16, its uses and how it can be referred during preparation of Income Tax Return.

Here is the list of 15 questions & answers that will help you understand Form 16 and its impact on tax

filing.

1. What is Form 16 and how it is different from Salary Certificate?

Form 16 is a certificate which is issued by the employers to their employees. It is a Tax Deduction at Source (TDS) certificate which shows the salary details and the tax deduction with various components.

The employer will provide Form 16 or TDS certificate if your salary paid is more than the maximum exemption limit. For example, if the maximum exemption limit for tax on salary is Rs 250,000, while the salary paid is Rs 200,000, the employer will issue a salary certificate. If the salary paid is Rs 300,000, the employer will issue Form 16 (TDS certificate).

2. Should I avail Form 16 and Salary certificate both?

If you have received Form 16, you do not require a Salary certificate. You will receive Form 16 only when your employer deducts TDS on your Salary.

3. What is the significance of Form 16? 

Form 16 contains various information such as tax calculation, the amount eligible for tax deductions, TAN, PAN of the Deductor etc. It also provides details of Tax Deducted at Source (TDS) by your Employer. 

4. What is PART A in Form 16? 

Part A of Form 16 contains employee and employer details. It provides information such as TAN, PAN of employer, details of the amount paid/credited and the Tax Deducted at Source by the employer.

5. What is PART B in Form 16? 

Part B of form 16 contains salary details, information about income from various sources that collectively form your gross total income, various tax benefits, total income, tax on it, etc. 

6. Is Form 16 the only document that I need for e-filing? Is it a complete document? 

No, Form 16 is not the only document that is needed for filing your income Tax Returns. It is a form of income certificate and it is referred for computing the total Salary.

For computing other income and deductions, refer to other related documents such as bank statements, interest certificates etc. Form 16 can serve as a complete document only if you are sure that you have reported all other income from various sources and investments to your Employer without hiding any other details. 

7. I have invested Rs 10,000 in Tax Saving FDRs. But, I forgot to declare it to my employer. Hence, my Form 16 is not showing it. What should I do?

You do not need to worry if you have not declared about your investment to your employer. You can claim the amount invested in tax-saving FDRs under section 80C by declaring the details in the relevant column in ITR while filing your Income Tax Return. 

8. I invested Rs 80,000 on LIC premium and paid Rs 30,000 as my child’s tuition fees. I declared it to my employer but I was given the tax credit of Rs 80,000 for LIC premium only. Am I not considered to get deduction Rs 30,000 for tuition fees? 

Yes, you can get full deduction of Rs. 110000 for LIC premium and tuition fees paid under section 80 C. If your Employer has not given you the tax benefit of tuition fees, you can still claim both the deductions while filing your Income Tax Return. 

9. I worked for two employers and hence I have two Form 16 documents. Do I need to file a separate return for each Form 16? 

No, you require filing only one Income Tax Return irrespective of how many Form 16s you receive. The Income Tax Return Form provides an option for reporting the salary from multiple employers while filing the Income Tax Return. You can also claim the deductions for which you are entitled. 

10.  My employer has not provided Form 16, how will I file my return?

If your employer has not provided you Form 16, there is nothing to worry about. You can still  file your return in the following ways: Collect your salary slips or pay slips to compute your total salary. View your Form 26AS or tax credit statement to match the TDS calculation. Gather all the requisite documents related to your investments and claim your deductions accordingly.

Please note that for Provident Fund, you can claim only the amount contributed by you but not by your employer.

Collect the rent receipts from your landlord to get the deduction for House Rent Allowance (HRA). If you have income from other sources such as interest from fixed deposit, house property, etc., do not forget to include the details in your Income Tax Return.

Mention tax amount and the amount of TDS as shown in Form 26AS in your ITR. Logon to Income Tax Website or E-Filing Private Websites to prepare your ITR with the above details and e-file your Income Tax Return. ils and e-file your Income Tax Return. 

11.  During the financial year 2015-2016, I paid Rs. 15000 per month as rent to the landlord. But, the landlord neither provided PAN nor any sort of declaration. As a result, my employer did not provide HRA benefit in Form 16. Can I still claim it? 

Yes, you can claim it, if you have enough evidence to prove that you have actually paid the rent. You will be required to present the evidence to the Income Tax Department claiming that the rent has been paid. You can present your bank statements if you have made payments by cheque.

If you have paid rent by cash, you can ask the landlord to provide the duly signed acknowledgment receipt as a proof of payment. Despite all evidence, it is completely dependent on the discretion of the Income Tax Department whether they get convinced by the evidence and accordingly they may provide tax benefit on HRA. 

12.  My Form 16 is not displaying complete TDS. How can I claim it? 

If your Form 16 is not displaying complete TDS, you must verify the Form 26AS. If TDS is reflected in Form 26AS, you must immediately inform your employer and request to issue the revised Form 16.

If TDS is not reflected in your Form 26AS, your details are not properly updated and the reasons could be incorrect PAN, incomplete form, mistakes while filing the TDS return by your employer, etc. In such cases, you must inform your employer and request to take necessary action. 

13.  What are the important factors to consider in Form 16?

When you receive Form 16, you must check the following: Name, PAN, Employer’s TAN, Cross check the Salary (mathematical) numbers from your pay slips.

14.  My Employer has miscalculated my HRA exemption as Rs. 145,239, whereas it is Rs. 185,239. Will I get a claim for the remaining amount?

When an employer by miscalculates the HRA exemption , the employee can still get the tax benefit of HRA while filing the Income Tax Return. Remember, all deductions which were omitted while generating Form 16 can be claimed while filing the Income Tax Return, provided that you are eligible as per the Income Tax Laws.

So, if you have enough evidence to prove the genuineness of the exempted HRA amount, you can claim Rs. 185,239 while filing your return instead of Rs. 145,239 as given in Form 16. 

15.  My Form 16 is showing incorrect PAN. What should I do? 

It may happen that your employer has mentioned an incorrect PAN in your Form 16. This is a very serious issue due to which you may not be able to claim your TDS amount and so necessary actions are required to be taken as soon as possible.

In such case, you need to inform your employer of the said error and ask him to correct it on his end. He will have to file a revised TDS return correcting your PAN so that the tax deducted from your income gets displayed against your PAN.

Moreover, after the revised return has been filed download your Form 26AS to check that the TDS has been correctly reflected in your tax credit statement.