2 min read
05 Jan 2021

Is Form 16 mandatory?

Form 16 is a TDS certificate 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. Here’s a brief lowdown to help you understand if there are alternatives to the same.

Is it 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 less than Rs. 2.5 lakh for the financial year are exempted from paying the 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 the 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.
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.

If you do not receive it by mid-May, you can remind your employers to issue Form 16.

Is Form 16 mandatory for ITR?

The responsibility to deduct taxes at source lies with the employer, but paying the tax is on the employees. If the employer fails to deposit TDS, you must make it a point to pay your taxes immediately to avoid penalties. You can claim this amount later from your employer.
If your employer has deposited the tax yet 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, making you ineligible for any refunds or 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? If you’re an employer, you must 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 financial institutions or government authorities validate it to check your salary breakup.

Additional Read: Form 26QB Guide

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Frequently asked questions

Is Form 16 mandatory for a home loan?

Form 16 is not mandatory for a home loan, but it can strengthen your application. It serves as an income proof, showcasing your tax deducted at source on salary which lenders use to assess your repayment capacity.

Will I get a loan if I don't have form 16?

Yes, you can get a loan without Form 16. Lenders use other documents like bank statements, salary slips, and income declarations to verify your income when Form 16 is not available.

What is the purpose of Form 16?

Form 16 serves the purpose of a salary and tax statement. It details the amount of tax deducted at source (TDS) by the employer and provides an overview of your earnings for the financial year.

Is Form 16 mandatory for all types of employees?

Form 16 is issued by employers to their salaried employees. All employees whose income is subject to TDS are entitled to receive it. However, it isn't applicable to self-employed individuals or those working on a contract basis.

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