Income Tax Returns Form 16

The employers issue Form 16 to their employees as a certificate at the end of each financial year to file income tax return. The salaried person uses Form 16 and Form 16A as a supporting document that provides the complete details of the income earned and taxable income, after various deductions according to the income tax rule.

A specific amount of tax is deducted from the salary of the employees. This process of tax deduction from an employee’s salary is referred to as TDS or Tax Deduction at Source. Legally, it is the duty of every company owner to get the Tax Identification Number, also called TIN, from the Govt. Department.

Income Tax Returns Form 16

When a bank deducts tax for interest earned by FD, the bank issues a TDS certificate along with Form 16A to the customer. Form 16 is issued, in case of salaried employees. Form 16A is also used for interest on securities, dividends, remuneration or prize on sale of lottery tickets, rent, interest other than interest on securities, winnings from the lottery, Horse Race, fees for professional or technical services, payments on account of repurchase of units by Mutual Fund or Unit Trust of India, the income of foreign companies referred to in section 196A(2), payments to contractors and subcontractors, insurance commission, payments to non-resident associations, payments in respect of deposits under National Savings Scheme, commission, the income of Foreign Institutional Investors from securities referred to in section 196, income from units referred to in section 196B, income from foreign currency bonds or shares of an Indian company referred to in section 196C. Form 16A is also used in various other fields.

However, Form16 is more popular as it is needed in approving loans. There are a number of benefits that you can get by filling Form 16. Filling Form 16 manually seems difficult as compared to the online filing of Form 16. Also, if you fill the form by using the online service, it will save you time.  Most of the taxpayers are opting for online form-filling these days as one can easily find all the income tax forms on the website of the income tax of India.  Now, there is no need to issue printed certificates to employees as you can now find these certificates on the income tax India website. Now, the Central Board of Direct Taxes maintains an online tax deducted at the source account for each taxpayer. This provides better facilities for each taxpayer for filing their  income tax return.

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