Form 16 is a document issued by employers to salaried employees as proof of the tax deducted at source (TDS) on their salary. It gives a summary of salary income, tax deductions, and other relevant tax-related details, and is typically required when filing your Income Tax Return (ITR). However, if for any reason you don’t receive Form 16—such as leaving a job mid-year or not crossing the taxable income limit—you can still file your ITR. By using your salary slips, Form 26AS, and the Annual Information Statement (AIS), you can gather the required information. In this article, we’ll explain how salaried individuals can successfully file their ITR even without a Form 16, and also highlight the changes made to Form 16 this year.
Form 16 changes: Higher standard deduction for these taxpayers, and other changes in Form 16 for FY 2024-25 (AY 2025-26)
Form 16 for the financial year 2024–25 will reflect several updates introduced by Budget 2024, and these changes are important for salaried employees filing their ITR. Here are the major updates you should know:
1. Inclusion of other income and TCS deductions
Employees can now declare income from sources other than salary and Tax Collected at Source (TCS) to their employers using Form 12BBA. If you’ve submitted this form, the tax deducted from such income will also appear on your Form 16. This makes it easier to manage your total tax liability, as the employer can adjust your salary TDS accordingly. This change is particularly useful for taxpayers with rental income, interest income, or specified high-value expenses subject to TCS.
2. Higher standard deduction under new regime
Form 16 will now reflect an increased standard deduction if you opt for the new tax regime. From FY 2024–25 onwards, the deduction has been raised from Rs. 50,000 to Rs. 75,000. This change will be shown in the salary break-up section of Form 16 and will help reduce your taxable salary under the new regime.
3. Improved transparency and salary breakdown
With these changes, your Form 16 will show a clearer view of total income, deductions, and tax liability. This transparency helps both the employer and employee during ITR filing, especially when choosing between the old and new tax regimes.
These updates aim to make ITR filing easier and more accurate, especially for those with multiple sources of income or opting for the new tax structure.
What is Form 16?
Before learning how to file your ITR without Form 16, it’s essential to understand what this form includes. Form 16 is a TDS certificate issued annually by employers when tax has been deducted from an employee's salary. It consists of:
Part A: Employer and employee details (like PAN, TAN, address), quarterly TDS summary, and tax deposited.
Part B: Salary details, deductions under Chapter VI-A, and any additional income declared by the employee.
Employers are legally required to issue this certificate by 15 June of the following financial year. However, Form 16 is not always issued—for example, when no TDS has been deducted or when the employee’s income falls below the taxable limit. Still, filing ITR remains necessary based on your actual income.
Step-by-step guide to filing ITR without Form 16
Follow the steps below to file your ITR without Form 16:
Step 1: Gather necessary documents
Without Form 16, you need to collect various documents to accurately report your income and deductions. These include:
Salary slips: Collect all your monthly salary slips to determine your total salary for the financial year.
Form 26AS: This is a consolidated tax statement that shows the details of tax deducted, collected, and paid during the year. You can download it from the Income Tax Department’s e-filing portal.
Bank statements: Gather statements from all your bank accounts to identify interest income and other credits.
Investment proofs: Collect documents for investments made under Section 80C (e.g., PPF, NSC, ELSS), Section 80D (medical insurance), and other eligible deductions.
Loan statements: If you have a home loan or education loan, collect the interest certificate from your lender.
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Step 2: Calculate your total income
Using your salary slips, calculate your gross salary for the financial year. This should include:
Basic salary: Sum up the basic salary from all salary slips.
Allowances: Include allowances such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), and any other allowances.
Perquisites and bonuses: Add any bonuses, incentives, and perquisites received during the year.
Step 3: Compute exemptions and deductions
Identify exemptions and deductions that can reduce your taxable income.
HRA exemption: If you are eligible for HRA, calculate the exempt portion. The exempt amount is the least of the following three:
Actual HRA received.
50% of salary (for metro cities) or 40% (for non-metro cities).
Rent paid minus 10% of salary.
Use the least value from the above calculations as your HRA exemption.
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Section 10 exemptions: Include exemptions like Leave Travel Allowance (LTA), and Children Education Allowance.
Deductions under Chapter VI-A: These include:
Section 80C: Investments in PPF, EPF, NSC, ELSS, Life Insurance Premium, etc. (up to Rs. 1.5 lakh).
Section 80D: Medical insurance premiums.
Section 80E: Interest on education loan.
Section 80TTA: Interest on savings account (up to Rs. 10,000).
Step 4: Verify tax deducted using Form 26AS
Form 26AS is crucial as it provides a summary of taxes deducted at source (TDS) and deposited to the government. Compare the TDS mentioned in your salary slips and other income sources with Form 26AS to ensure there are no discrepancies.
Step 5: Compute your taxable income
Subtract all exemptions and deductions from your gross salary to calculate your taxable income. The formula is:
Taxable income = Gross salary - exemptions - deductions
Step 6: Calculate tax liability
Once you have your taxable income, calculate the tax liability based on the applicable tax slabs for the financial year. Apply the relevant slab rates to compute your tax liability.
Step 7: Pay additional tax (If any)
If there is any additional tax liability after considering the TDS and other tax credits, pay the balance tax online through the Income Tax Department’s e-filing portal using Challan 280.
Step 8: Fill in the ITR Form
Log in to the Income Tax e-filing portal and select the appropriate ITR form (usually ITR-1 or ITR-2 for salaried individuals). Enter your personal details, income details, and tax paid details as calculated above. Ensure that all information is accurate and matches your documents.
Step 9: Verify and submit your ITR
After filling in all the details, review your ITR form carefully. Once you are satisfied that all information is accurate, submit your ITR. Upon submission, an acknowledgment number (ITR-V) will be generated.
Step 10: E-verify your ITR
E-verifying your ITR is the final step. You can do this through various methods, including:
Aadhaar OTP: Receive a one-time password (OTP) on your registered mobile number.
Net banking: Generate an Electronic Verification Code (EVC) through your bank’s net banking portal.
Physical ITR-V: If you cannot e-verify, sign the ITR-V acknowledgment and send it to the Centralized Processing Centre (CPC) in Bengaluru within 120 days.
Form 16 not issued by the employer
a. If there is no TDS, is the employer required to issue a Form 16?
If your employer has not deducted any TDS, they are not obligated to provide you with Form 16 Part A. This part contains TDS details, and if no tax has been deducted, there’s no requirement to issue it. However, the employer may still issue Part B, which details your salary structure and deductions. This can be helpful while filing your ITR.
b. When the employer deducts TDS and does not issue a certificate?
If your employer deducts TDS, it is mandatory for them to issue you a Form 16. The Income Tax Act requires the employer to generate and provide this form through the TRACES portal. It should list how much TDS has been deducted, the relevant quarter, and other tax-related details.
If the employer fails to issue the form, they can face a penalty of Rs. 100 per day of default. You can report this issue to the Assessing Officer, who may take appropriate action, including levying penalties. Additionally, check Form 26AS for TDS details. If no TDS is shown there, despite deductions on your payslip, it could mean the employer hasn’t deposited the tax with the government. In that case, you may have to pay the tax yourself and then recover it from the employer.
c. If no Form 16 has been issued to me, does it mean I don’t have to pay tax or file a return?
No, you still have to file your ITR and pay applicable taxes if your income exceeds the basic exemption limit—Rs. 2.5 lakh under the old regime or Rs. 3 lakh under the new regime. The responsibility of calculating tax and filing ITR lies with you, not your employer, even if they have not issued Form 16.
What are the instances in which Form 16 is not issued by the employer?
There are certain situations where an employer might not issue Form 16. These include:
1. No TDS was deducted
If your total income during the year was below the taxable threshold (Rs. 2.5 lakh for those under 60), the employer may not deduct any TDS. In this case, they are not required to issue Form 16.
2. Contractual or freelance work
If you are not a salaried employee but rather work on a contract or freelance basis, the employer will deduct TDS under a different section and issue Form 16A instead. Form 16A is for non-salary payments.
3. Employer is non-compliant or the company shut down
In rare cases where the company closes down or fails to comply with TDS rules, they may not issue Form 16 even after deducting TDS. In such cases, check Form 26AS to verify whether the deducted tax was deposited. If not, you may need to take further steps, including reporting the issue to the Income Tax Department.
4. Employee left the company mid-year
If you resigned before any TDS was deducted and your total income with that employer was below the taxable limit, they might not issue Form 16.
In all these cases, you are still responsible for filing your ITR using other available documents like salary slips and Form 26AS.
Tips for accurate ITR filing without Form 16
Double-check details: Ensure all personal details and income figures are accurate and match your documents.
Claim all deductions: Make sure to claim all eligible deductions to reduce your tax liability.
Cross-verify with Form 26AS: Always cross-verify the TDS details with Form 26AS to avoid discrepancies.
Keep records: Maintain all supporting documents for investments, deductions, and other incomes in case of future queries from the Income Tax Department.
Timely filing: File your ITR before the deadline to avoid penalties and interest.
Discrepancies on late issue of Form 16
If you receive your Form 16 after already filing your ITR and you notice differences between what you filed and the details in the form, don’t worry—you can revise your return. However, make sure to do so before 31 December 2024 for returns filed for FY 2023–24.
Always cross-check your salary, deductions, and TDS figures with those in your Form 16. If there’s a mismatch, correct the discrepancies in your revised return. Using platforms like ClearTax can make the revision and filing process quicker and simpler.
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Conclusion
Filing ITR without Form 16 may seem challenging, but with a systematic approach and attention to detail, it is entirely manageable. By gathering all necessary documents, accurately calculating your income and deductions, and cross-verifying with Form 26AS, you can ensure a smooth and accurate filing process. Remember, the key is to stay organised and diligent in reporting all sources of income and eligible deductions.
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