Form 16 is a TDS certificate issued by the employers to their employees at the end of each financial year. It is proof of the tax deducted on their salary and submitted to the government by the employer. This form is issued under Section 2013 of the Income Tax Act.

Only employees who earn more than Rs.2.50 lakh in salary in a financial year is liable for TDS on their salary according to the Income Tax Act.

Employers can opt for Form 16 download from the official website of the Income Tax Department.

What is the importance of Form 16?

This form plays a vital role in income tax filing. It contains the necessary information required to make IT filling process easier. It has the detailed breakup of an individual’s income during a specific financial year and the taxes they have paid.

When is Form 16 issued?

Employers are required to issue this form by 31st May of an assessment year. Doing so will allow individuals to file their IT return within the due date.

Financial year and assessment year are s not the same concept. A financial year is between 1st April and 31st May, where individuals earn their annual income. And, in the following assessment year, this income is assessed and taxed.

How to download Form 16?

Individuals can download this form online via the website of TRACES. They have to log in with User ID, password, TAN of the employer and verification code and request for their form 16 of the respective financial year.

Form 16 acts as an income proof document. Financial institutions ask for this form when approving loans and credit cards. Thus, if individuals apply for credit cards like the Bajaj Finserv RBL Bank SuperCard, then submitting this document is necessary.