Form 16 is a certificate that is issued under Section 203 of the Income Tax Act, in consideration with the tax deducted at source from salary. Form 16 is also considered as the detailed record of the Income Tax deducted from the salary of an employee by the employer. At times Form 16 is also called as Salary Certificate, as it contains all the details related to an employee’s salary paid to him/her by their employer.
Why a Salaried Employee needs Form 16?
A salaried employee generally needs Form 16 to file his/her Form 16. There is the necessity of Form 16, as it contains the detailed information about an employee’s salary paid to him/her by his/her employer. It is one of the most important documents that you need to submit while filing your Income Tax Returns.
Form 16 is also accepted as an income proof in various transactions such as loan processing etc. Form 16 can be used to verify the amount of taxes paid to the government by comparing the amount mentioned on your Form 26AS. Form 16 also serves as proof that correct amount of tax has been deducted from the salary of an employee by the employer and deducted amount is deposited to the Government of India.