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Why is Form 16 Required and its Importance for ITR

  • Highlights

  • Employers need to provide employees with Form 16

  • Form 16 certifies TDS deductions from your income

  • Refer to Form 26AS when you don’t have Form 16

  • Why is Form 16 required for ITR Filing

Is Form 16 Mandatory?

Form 16 is a TDS Certificate that must be provided to employees, by their employers. It certifies that the income tax on your income from salary has been deducted at source, and deposited with the Central Government Account.

Form 16 is one of the most important documents for filing your Income Tax Returns, as it contains most of the details required for filing your returns. Whether Form 16 is mandatory or not, is a common query that you may have thought about. Here’s a brief lowdown to help you understand if there are alternatives to the same.

It is mandatory for employers to provide Form 16?

Procuring Form 16 is easy, if you’re an employee. The employer or the entity that deducts your Tax Deducted at Source (TDS) is legally bound to issue Form 16 by May 31.

Employees with an income of less than Rs. 2,50,000 for the Financial Year, are exempted from income tax. Hence, if no tax has been deducted, Form 16 will not be issued to them.

Why is Form 16 Required?

TDS deductors must deposit the TDS amount on or before of 7th of every month, and file TDS returns quarterly. Employers may fail to provide Form 16 to you if they have not deposited the TDS or not filed the TDS returns.

In such a scenario, you can download Form 26AS to cross-check if the employer has deposited the TDS with the government exchequer. If you find out that your employer hasn’t deposited the TDS, you should ask them to do so immediately. If they have deposited the TDS, then you must be issued Form 16 at the earliest.

It is always a good practice to remind your employers about issuing your Form 16, if you don’t receive it by mid-May.

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Is form 16 mandatory for ITR

The responsibility to deduct taxes at source, lies with the employer, but the onus of paying tax is on the employees. If the employer fails to deposit TDS, you must make it a point to pay your taxes immediately, so you can avoid penalties. This amount can be claimed from your employer later.

In case your employer has deposited the tax, but not issued Form 16 to you, and you are running out of time to file your income tax returns, you need not wait for your employer. Delays in filing your returns can incur penalties, so you wouldn’t be eligible for any refunds on overpaid taxes.

In such a scenario, you need to retrieve details about your employer’s name, address, PAN and TAN and refer to Form 26AS. The form contains details of taxes deducted and deposited from various sources of your income. For the breakup of your salary, you may refer to your salary slips. Also, you can compile details or copies of all your tax-saving investments, which you may have furnished to your employer as proof of investment. This may be a tedious task but will help you in filing the returns on time.

Are you still wondering if Form 16 is mandatory? Well, if you’re an employer, it is compulsory for you to issue Form 16 to the employee. While you can file your ITR without Form 16, you may be required to furnish it to the Income Tax Department in case of anomalies, or discrepancies found in your returns. Form 16 is also important because man financial institutions or government authorities ask for it to check your salary breakup.

Additional Read: Uses of Form 16 in India

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