This is the month when almost all salaried professionals will get their Form 16. Income tax for salaried is largely dependent on Form 16 which shows all the earnings and deduction for the year. These details will form the basis of their income tax return ITR.
Form 16 – The crucial document for Income Tax
Form 16 is the crucial and almost the nost important document for salaried PAN card holders for filing of Income tax returns. It contains
- Tax deducated by employee pay
- tax ubmitted by emplyer to government on behalf of employee
- Earnings
As per the tax experts, “Form 16 is the basis on which most people file their returns. Every salaried individual should learn how to read the Form 16 ad understand the figures.”
Explanation of two parts of Form 16
The Form 16 has two parts. Each part becomes the basis of an individual’s ITR filing.
A Part: Focuses on Tax deducted at Source information, including the deducted tax amount and challan details) used for depositing the TDS with the government by the employer
B Part: Provides a detailed breakup of your salary income, including allowances, deductions claimed, and other tax-related details
What to do after getting Form 16
To make it as simple as it can be, here is the easiest explanation of Form 16:
- It shows how much money you have earned in a year
- It shows how much tax government has already received by means of TDS
Once you have received the Form 16, you are advised to do the following:
- Thank God that your employer has given you the Form 16 in time. Just joking
- Review the information: Check all details, if there is any error, get it rectified.
- Things to look at: Your own information, Employer information, All numbers, deductions etc
- Compare it with your AIS
- Get all other papers (bank deposits, Capital gains, savings, insurance etc) in order
- File your Income tax return for the year
- Avoid common mistakes in filing ITR
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Disclaimer: This is not a legal advice. Please check the official website of Income Tax department and take advice of your CA.