Form 16

Form 16 is an Income Tax certificate issued by the employer which has details about how much tax was deducted and when was it submitted to the IT (Income tax) department. It is issued as proof of tax deducted and deposited. One can also consider Form 16 as a salary TDS certificate. It is also considered as a source of proof of Income Tax returns filed by an employee. Form 16 has two parts Part A and Part B.

Part A of Form 16

Part A of Form 16 consists of the details of tax deducted at source on salary. It includes the name and address of the employer, PAN (Permanent Account Number) and TAN (Tax deduction and collection account number), summary of the amount credited and tax deducted.

Part B of Form 16

Part B of Form 16 is an annexure to Part A. It has to be issued by the employer. It includes the details of salary breakup. It also consists of deductions allowed under the income tax act (Chapter VIA).

Eligibility of Form 16

As per the regulations issued by the Finance Ministry of the Indian Government, any individual who is earning a salary and files tax returns are eligible for Form 16. Employers use this certificate to maintain track of their earnings.