Form 16 is a certificate that consists of details of TDS (Tax Deducted at Source), other incomes, tax benefits, and tax calculations. Based on the data available in form 16 salaried employees can easily file their ITR (income tax returns). It will be issued once a year by the employer to the salaried employees under section 203 of the income tax act.
Form 16 is also known as the income tax calculator and it consists of Two parts part A and part B. If you want to file IT returns for the financial year 2019-20 in the assessment year 2020-21 then you can easily calculate your net income tax return amount by using the above form 16 excel format.
Difference between form 16 A and form 16B
Form 16 consists of two parts, they are part A and part B. The basic difference between part A and part B of form 16 is, part A consists of general information of employee and employer like their address, PAN & TAN details, etc.., whereas part B consists of salary and TDS details of the employee.
Part A of form 16 consist of the following details
- TDS Certificate number
- Date up to which form 16 is updated
- Name and address of employee and employer
- PAN & TAN of the employer
- PAN of the employee
- Period of employment with the employer.
- Assessment year for which TDS deducted.
- Summary of TDS paid or credited quarterly
Part B of Form 16 consist following details
- Gross salary of employee and allowances like house rent allowances, leave travel allowances, leave encashment and gratuity, etc..
- Deductions under entertainment allowances and tax on employment.
- Exemptions under section 80C, 80 CCC and 80 CCD such as investments in a provident fund such as EPF and PPF, payment towards life insurance premiums, equity-linked savings scheme (ELSS), payment towards home loan, payments towards Sukanya Samridhi Yojana scheme, National Savings Scheme, and Senior Citizens Savings Scheme. The maximum limit to get exemption under these sections is 1,50,000 Rs.
- Other deductions under section 80D (health insurance premium for self, family, and parents), 80E (payment towards education loan), section 80G (donations to relief funds and charitable trusts)
- Total taxable income
- Tax on total income.
- 2% education cess, 1% higher education cess, and 1% health cess.
- Relief under section 89 when the employee gets a salary in the form of arrears or advance.
- Finally tax payable amount.
Changes in income tax rules for ay 2020-21
- A rebate under section 87A has been increased to 12,500 Rs from 2500 Rs.
- Standard deduction has increased to 50000 Rs, earlier it was 40000 Rs.
- The limit of interest income for TDS has increased to 40000 Rs, earlier it was 10000 Rs.
- The limit of rental income for TDS has increased to 2.4 Lakhs, earlier it was 1.8 Lakhs.
How to Manually Fill Form 16 with Example
If you want to manually calculate how much tax you are liable to pay then use the above form 16 excel format for ay 2020-21 and enter your details as shown in the below images.
Sample Part A of Form 16 in Excel Format for Ay 2020-21
Sample Part B of Form 16 in Excel Format for Ay 2020-21
If you are still finding difficulties in calculating your net income tax amount then you can calculate it easily online at the income tax department web site of India. To calculate your income tax you need to select the assessment year, category of taxpayer, net taxable income, income tax after relief u/s 87A, surcharge, health, and education cess…
Form 16 Related Information
What is Form 16 Eligibility Salary
The eligibility salary limit to get form 16 is 2,50,000 Rs. If your annual income is 2,50,000 or above then you will fall in the income tax slab limit. In that case, you need to submit an investment declaration form to your employer.
Based on the details furnished on investment declaration form your employer will generate your form 16 after making TDS payment.
What is Investment declaration form
The investment declaration form is a declaration by the employee, based on the information provided on investment declaration form employers will calculate how much TDS should be deducted from the employee salary.
About TDS on salary
- TDS is a part of income tax, and the full form of TDS is Tax Deduction at Source. TDS will be deducted on salary and interest on bank deposits etc.
- TDS will be paid by the employer on behalf of employees. Based on the estimated earnings of a person the TDS will be calculated and the same amount will be paid to govt periodically i.e if the employer is paying salary every month then TDS will be deducted every month. ( If an employee falls under income tax slab limit).
- Based on the amount paid towards TDS the employees can adjust their net income tax payable for every financial year.
- If anyone pays excess TDS then the excess amount will be refunded to that person after filing IT returns.
How to get Form 16
If you are an employee, then they are two ways you can get your form 16. One is by asking your employer and the other option is a direct download from the TRACES website.
What is TRACES
The full form of TRACES is Reconciliation Analysis and Correction Enabling System. It is an online platform provided by the income tax department for both taxpayers and deductors. Here the taxpayers and deductors can pay taxes online and reconcile them while filing returns if they want to get a refund.
Here is the link to the TRACES website.
What is Form 16 password
After downloading form 16, you need to enter a password to open it. The password to open form 16 is your 10 digits PAN followed by your date of birth. For example, if your PAN number is BUOPM1234X and date of birth is 24/05/1985 then the password is BUOPM1234X24051985
Last date to issue form 16
The last date to issue form 16 to employees by employers is 31st May of every year. By this date, every employer has to issue form 16 to employees from whom they are deducting TDS.
If TDS is not deducting from employee salary then there is no need to issue form 16.
Employer is not giving form 16
It is the right of the employee to get form 16 when he contributing to TDS. If your employer is not issuing form 16 then under section 272A(2)(g) of income tax they need to pay a penalty of 100 Rs till the date of issue.
Form 16 Uses
- To file ITR: Form 16 is required to file IT returns and it acts a proof that you paid TDS.
- Form 16 acts as a proof of income, and it is required to get loans.
Due date to file income tax returns for Ay 2020-21 (Fy 2019-20)
The actual due date to file IT returns for the financial year 2019-2020 (ay 2020-21) is 31 st July 2020, but due to lockdown in India, the due date is extended to 30 November 2020.