Wednesday, 15 July 2015

Is it necessary to have a Form 16 to file Income Tax Return?

Part B of your Form 16 gives the composition of your annual salary in terms of taxable and non-taxable elements, such as Basic Salary, Travelling Allowance, House Rent Allowance, Provident Fund contribution (of both employee and employer), etc.

Further, Part A of the Form 16 reflects the amount of TDS deducted by your employer from your remuneration and deposited with the Income Tax Department for your credit.

It is your lawful right to receive a Form 16 from your employer by 30th April (i.e. within one month of end of the financial year). Otherwise, the employer can be liable to pay a penalty of Rs. 100 for each day by which he delays issuance of this certificate.

It is necessary for you to have a Form 16 before you file your Income Tax Return because it will enable your tax return preparer to fill in the correct taxable amount of your remuneration (as the amount you receive in your bank account is after various deductions, and your taxable salary may include the imputed value of various other benefits that you may receive from your employer). It will be extremely difficult for anyone to determine the correct taxable figures without your Form 16. However, having a Form 16 for filing of return is not a mandatory condition.

Form 16 also acts as a check for you to verify whether your employer has deposited the whole amount of TDS that he may have deducted from your salary.

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