financial services

Form 16 and why is it important?

What is Form 16?

Form 16 is certificate that is issued to a taxpayer by his/her employer, when he/she deducts tax from the employee’s salary. It is an extremely important document, that is issued to you in accordance with the provisions of the Income Tax Act, 1961.

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Form 16 contains the details related to Tax Deducted at Source or TDS on Salary by your employer along with the salary break up for a particular Financial Year. Form 16 can also be considered as a proof of the Tax Deducted at Source collected and deposited by the employer to the Government of India.

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Who can issue Form 16?

As Income Tax Law anyone who has a TAN no and deducts TDS on salary must provide his/her employees Form 16. If your employer is not deducting TDS, then in that case he/she can refuse to issue Form 16.

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When is Form 16 issued?

The date to issue Form 16 is supposed to be 31st May of the year for which it is being issued to the employee. Last year this date was extended to 15 June 2017. If the employer fails to issue Form 16 by the assigned date, then in that case he/she will have to pay a penalty of Rs.100 per day, till the day this default continues.

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