Form 16 Issuance
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For businesses having 1 - 25 employees. Includes TDS Filing for Q4 with Annexure II, Form 16 issuance and ITR-1 filing for employees.
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Form 16 Issuance to Employees
Form 16 is a certificate issued by employers to their employees, validating that TDS has been deducted and deposited with the government authorities on behalf of the employee. It provides a detailed summary of the salary paid to the employee and the deducted TDS. Form 16 contains all the information needed for an individual to prepare and file their income tax return. Employers are required to issue a Salary TDS certificate every year on or before the 15th of June of the year immediately following the financial year in which the tax is deducted. Form 16 consists of two components, Part A and Part B. In case an individual loses Form 16, they can request a duplicate form from their employer. Bmcs can assist with managing TDS compliance online. Our TDS experts can help you file all TDS returns, pay any overdue TDS deposits, and issue Form 16 to employees.
Structure of Form 16
Part A of Form 16
- Name and address of the employer
- TAN and PAN of employer
- PAN of the employee
- Summary of tax deducted and deposited quarterly, which is certified by the employer.
Part B of Form 16
Part B of Form 16 serves as an annexure to Part A, and it is prepared by the employer for employees. It provides a detailed breakdown of the salary deductions eligible for tax benefits under Chapter VI-A of the Income Tax Act. In the event of a job change within a single financial year, it is essential to obtain Form 16 from both employers. Here are some key components of Part B:
- Detailed breakup of salary
- Detailed breakup of exempted allowances under Section 10
- Deductions that are allowed under Income Tax Act (Under Chapter VIA)
Here is the list of deductions
- Deduction for life insurance premium paid, contribution to PPF, etc. under Section 80C
- Deduction for contribution to pension funds under Section 80CC
- Deduction for employee's contribution to a pension scheme under Section 80CCD(1)
- Deduction for taxpayer's self contribution to a notified pension scheme under Section 80CCD(1B)
- Deduction for employer's contribution to a pension scheme under Section 80CCD(2)
- Deduction for health insurance premium paid under Section 80D
- Deduction for interest paid on loan taken for higher education under Section 80E
- Deduction for donations made under Section 80G
- Deduction for interest income on savings account under Section 80TTA
TDS on Salary
TDS (Tax Deducted at Source) is calculated based on the income tax rates applicable for the specific financial year in which the payment to the employee is made. The individual or entity responsible for deducting TDS can adjust the amount of TDS either upwards or downwards to account for any discrepancies in the previous deductions or excess deductions. This adjustment aims to ensure that the right amount of tax is withheld from the employee's income, preventing underpayment or overpayment of taxes. Adjustments are typically made in subsequent payments to rectify any discrepancies and ensure compliance with tax regulations.
The total amount of the TDs will be determined by the following elements:
| Exemption Limit | Leave Encashment | Notified Allowances |
| House rate allowance | Perquisites | Donation by employees under 80G |
| Other deductions | Bonus or incentives | Estimated Salary |
When an individual works for multiple employers during a financial year, one of the employers chosen by the employee will deduct tax on the aggregate salary. The employee must provide this information to the chosen employer by submitting Form 12B, which includes details of income, deductions, and exemptions. Once Form 12B is submitted to the selected employer, that employer becomes responsible for deducting TDS based on the provided information. It is essential for both the employee and the chosen employer to ensure accurate reporting and compliance with TDS regulations in such cases.
Deposit of Tax to Government by Employers
The tax deducted from employees' salaries must be deposited by the employer using income tax challan ITNS 281 on or before the 7th of each month for the previous month. Since 2008, all corporate assessees and assessees subject to tax audit are mandated to make TDS payments online through internet banking facilities. Additionally, an assessee has the flexibility to make tax payments from another person's account, but the challan used for making the payment should indicate the PAN of the assessee on whose behalf the payment is made. This ensures proper record-keeping and accountability in the tax payment process.
Due Date for Filing TDS Returns by Employers
TDS return must be filed with the Government every quarter as follows:
| Quarter | The due date for filing TDS return |
|---|---|
| April- May – June | July 31st |
| July- August- September | October 31st |
| October – November – March | January 31st |
| January – February – March | May 31st |
Annexure-II of TDS Return in May 31st
When employers file their TDS return by May 31st, they are required to provide several details about their employees, including the information about TDS deducted and deposited. Annexure-II of the TDS return consists of various data points that must be meticulously prepared by the HR and the accountant of the business. Accurate and thorough record-keeping is essential to ensure compliance with TDS regulations and facilitate the smooth processing of TDS returns.
Issuance of Form 16 to Employees
Form 16A provides details about TDS from income other than salary, Form 16B provides details of TDS on purchase of property, Form 16C is for TDS under Section 194-IB for rent payments, Form 16A is for TDS from income other than salary, and Form 27D is used for Tax Collected at Source (TCS). The due date for issuance of Form 16 to employees is on or before June 15th of the financial year immediately following the financial year in which the tax is deducted. In the case of Form 16A, these certificates should be issued every quarter to provide details about TDS from sources other than salary. Timely issuance of these certificates ensures transparency and helps employees with their income tax return filings.
Frequently Asked Questions
BMCS India offers comprehensive business consultancy services, including strategy development, market research and analysis, financial advisory, operational optimization, and organizational transformation. We provide customized solutions to help businesses address challenges and achieve their growth objectives.
BMCS is the top most business management consultant all around the world. Our team of experienced consultants leverages industry knowledge, market insights, and proven methodologies to provide tailored solutions that align with your business goals. Whether you need assistance with market entry, strategic planning, process optimization, or talent management, we collaborate closely with you to understand your unique needs
BMCS India has expertise across various industries, including but not limited to technology, healthcare, manufacturing, retail, finance, and hospitality. Our consultants have worked with diverse clients, enabling us to understand industry-specific challenges and devise strategies that meet your sector's requirements.
To engage our services, you can reach out to us through our contact form, email, or phone. Our team will schedule an initial consultation to discuss your business objectives, challenges, and requirements. Following this consultation, we will provide a tailored proposal outlining the scope of work, deliverables, timeline, and pricing for your approval.
Absolutely! We work with businesses of all sizes, ranging from startups and small enterprises to multinational corporations. Our services are flexible and customizable to meet your specific needs, ensuring that you receive the level of support required to achieve your business objectives, irrespective of your company's size.
At BMCS India, we understand the importance of client confidentiality. We adhere to strict data protection protocols and maintain the highest level of confidentiality. Our consultants sign non-disclosure agreements, and we have robust internal systems in place to safeguard client information. Rest assured, your sensitive data is handled with the utmost care and confidentiality.
Yes, we can help your business expand internationally. Our team has experience and expertise in supporting companies with market entry strategies, feasibility studies, partner identification, and localization strategies in various global markets. We leverage our network of international partners to provide you with valuable insights and guidance throughout the expansion process.
To get started with BMCS India, simply reach out to us through our contact information on our website. We will be glad to schedule an initial consultation to understand your business requirements and discuss how our services can benefit you. From there, we will work together to develop a tailored plan to drive your business success.