Tue,19Jul,20166:29PMIndianMarketsareclosed

15queriesaboutForm16answeredanditsimpactontax
filing
AllyoueverwantedtoknowaboutForm16andwhyisitsignificantforsalariedtaxpayers.
Bymytaxcafe.com|YahooFinanceIndia2hours11minutesago

WiththeIncomeTaxfilingseasoninfullswing,alotofsalariedtaxpayers,especiallythenewtaxpayers,havelotof
questionsaboutinterpretingForm16,itsusesandhowitcanbereferredduringpreparationofIncomeTaxReturn.
Hereisthelistof15questions&answersthatwillhelpyouunderstandForm16anditsimpactontaxfiling.
1.WhatisForm16andhowitisdifferentfromSalaryCertificate?
Form16isacertificatewhichisissuedbytheemployerstotheiremployees.ItisaTaxDeductionatSource(TDS)
certificatewhichshowsthesalarydetailsandthetaxdeductionwithvariouscomponents.
TheemployerwillprovideForm16orTDScertificateifyoursalarypaidismorethanthemaximumexemptionlimit.For
example,ifthemaximumexemptionlimitfortaxonsalaryisRs250,000,whilethesalarypaidisRs200,000,the
employerwillissueasalarycertificate.IfthesalarypaidisRs300,000,theemployerwillissueForm16(TDScertificate).
2.ShouldIavailForm16andSalarycertificateboth?
IfyouhavereceivedForm16,youdonotrequireaSalarycertificate.YouwillreceiveForm16onlywhenyouremployer
deductsTDSonyourSalary.
3.WhatisthesignificanceofForm16?
Form16containsvariousinformationsuchastaxcalculation,theamounteligiblefortaxdeductions,TAN,PANofthe
Deductoretc.ItalsoprovidesdetailsofTaxDeductedatSource(TDS)byyourEmployer.
4.WhatisPARTAinForm16?
PartAofForm16containsemployeeandemployerdetails.ItprovidesinformationsuchasTAN,PANofemployer,details
oftheamountpaid/creditedandtheTaxDeductedatSourcebytheemployer.
5.WhatisPARTBinForm16?

PartBofform16containssalarydetails,informationaboutincomefromvarioussourcesthatcollectivelyformyourgross
totalincome,varioustaxbenefits,totalincome,taxonit,etc.
6.IsForm16theonlydocumentthatIneedforefiling?Isitacompletedocument?
No,Form16isnottheonlydocumentthatisneededforfilingyourincomeTaxReturns.Itisaformofincomecertificate
anditisreferredforcomputingthetotalSalary.
Forcomputingotherincomeanddeductions,refertootherrelateddocumentssuchasbankstatements,interest
certificatesetc.Form16canserveasacompletedocumentonlyifyouaresurethatyouhavereportedallotherincome
fromvarioussourcesandinvestmentstoyourEmployerwithouthidinganyotherdetails.
7.IhaveinvestedRs10,000inTaxSavingFDRs.But,Iforgottodeclareittomyemployer.Hence,my
Form16isnotshowingit.WhatshouldIdo?
Youdonotneedtoworryifyouhavenotdeclaredaboutyourinvestmenttoyouremployer.Youcanclaimtheamount
investedintaxsavingFDRsundersection80CbydeclaringthedetailsintherelevantcolumninITRwhilefilingyour
IncomeTaxReturn.
8.IinvestedRs80,000onLICpremiumandpaidRs30,000asmychildstuitionfees.Ideclaredittomy
employerbutIwasgiventhetaxcreditofRs80,000forLICpremiumonly.AmInotconsideredtoget
deductionRs30,000fortuitionfees?
Yes,youcangetfulldeductionofRs.110000forLICpremiumandtuitionfeespaidundersection80C.IfyourEmployer
hasnotgivenyouthetaxbenefitoftuitionfees,youcanstillclaimboththedeductionswhilefilingyourIncomeTax
Return.
9.IworkedfortwoemployersandhenceIhavetwoForm16documents.DoIneedtofileaseparate
returnforeachForm16?
No,yourequirefilingonlyoneIncomeTaxReturnirrespectiveofhowmanyForm16syoureceive.TheIncomeTax
ReturnFormprovidesanoptionforreportingthesalaryfrommultipleemployerswhilefilingtheIncomeTaxReturn.You
canalsoclaimthedeductionsforwhichyouareentitled.
10.MyemployerhasnotprovidedForm16,howwillIfilemyreturn?
IfyouremployerhasnotprovidedyouForm16,thereisnothingtoworryabout.Youcanstillfileyourreturninthe
followingways:Collectyoursalaryslipsorpayslipstocomputeyourtotalsalary.ViewyourForm26ASortaxcredit
statementtomatchtheTDScalculation.Gatheralltherequisitedocumentsrelatedtoyourinvestmentsandclaimyour
deductionsaccordingly.
PleasenotethatforProvidentFund,youcanclaimonlytheamountcontributedbyyoubutnotbyyouremployer.
CollecttherentreceiptsfromyourlandlordtogetthedeductionforHouseRentAllowance(HRA).Ifyouhaveincome
fromothersourcessuchasinterestfromfixeddeposit,houseproperty,etc.,donotforgettoincludethedetailsinyour
IncomeTaxReturn.
MentiontaxamountandtheamountofTDSasshowninForm26ASinyourITR.LogontoIncomeTaxWebsiteorE
FilingPrivateWebsitestoprepareyourITRwiththeabovedetailsandefileyourIncomeTaxReturn.ilsandefileyour
IncomeTaxReturn.
11.Duringthefinancialyear20152016,IpaidRs.15000permonthasrenttothelandlord.But,the
landlordneitherprovidedPANnoranysortofdeclaration.Asaresult,myemployerdidnotprovide
HRAbenefitinForm16.CanIstillclaimit?
Yes,youcanclaimit,ifyouhaveenoughevidencetoprovethatyouhaveactuallypaidtherent.Youwillberequiredto
presenttheevidencetotheIncomeTaxDepartmentclaimingthattherenthasbeenpaid.Youcanpresentyourbank
statementsifyouhavemadepaymentsbycheque.
Ifyouhavepaidrentbycash,youcanaskthelandlordtoprovidethedulysignedacknowledgmentreceiptasaproofof
payment.Despiteallevidence,itiscompletelydependentonthediscretionoftheIncomeTaxDepartmentwhetherthey
getconvincedbytheevidenceandaccordinglytheymayprovidetaxbenefitonHRA.

12.MyForm16isnotdisplayingcompleteTDS.HowcanIclaimit?
IfyourForm16isnotdisplayingcompleteTDS,youmustverifytheForm26AS.IfTDSisreflectedinForm26AS,you
mustimmediatelyinformyouremployerandrequesttoissuetherevisedForm16.
IfTDSisnotreflectedinyourForm26AS,yourdetailsarenotproperlyupdatedandthereasonscouldbeincorrectPAN,
incompleteform,mistakeswhilefilingtheTDSreturnbyyouremployer,etc.Insuchcases,youmustinformyour
employerandrequesttotakenecessaryaction.
13.WhataretheimportantfactorstoconsiderinForm16?
WhenyoureceiveForm16,youmustcheckthefollowing:Name,PAN,EmployersTAN,CrosschecktheSalary
(mathematical)numbersfromyourpayslips.
14.MyEmployerhasmiscalculatedmyHRAexemptionasRs.145,239,whereasitisRs.185,239.WillI
getaclaimfortheremainingamount?
WhenanemployerbymiscalculatestheHRAexemption,theemployeecanstillgetthetaxbenefitofHRAwhilefilingthe
IncomeTaxReturn.Remember,alldeductionswhichwereomittedwhilegeneratingForm16canbeclaimedwhilefiling
theIncomeTaxReturn,providedthatyouareeligibleaspertheIncomeTaxLaws.
So,ifyouhaveenoughevidencetoprovethegenuinenessoftheexemptedHRAamount,youcanclaimRs.185,239while
filingyourreturninsteadofRs.145,239asgiveninForm16.
15.MyForm16isshowingincorrectPAN.WhatshouldIdo?
ItmayhappenthatyouremployerhasmentionedanincorrectPANinyourForm16.Thisisaveryseriousissuedueto
whichyoumaynotbeabletoclaimyourTDSamountandsonecessaryactionsarerequiredtobetakenassoonas
possible.
Insuchcase,youneedtoinformyouremployerofthesaiderrorandaskhimtocorrectitonhisend.Hewillhavetofilea
revisedTDSreturncorrectingyourPANsothatthetaxdeductedfromyourincomegetsdisplayedagainstyourPAN.
Moreover,aftertherevisedreturnhasbeenfileddownloadyourForm26AStocheckthattheTDShasbeencorrectly
reflectedinyourtaxcreditstatement.
Thisarticlehasbeenwrittenbymytaxcafe.comwhichhelpspeopletoefiletheirincometaxreturn.