Form 16 – Income Tax FY 2020-21/ AY 2021-22
Table of Contents
What is Form 16 FY – Income Tax 2020-21/ AY 2021-22?
Form 16/ 16A is the certification of tax deduction at source provided by the employer on behalf of the workers. These certifications explain the TDS / TCS for numerous transactions between the deductor and the deductee. These certifications must be issued to Taxpayers. Form 16 Format – Income Tax FY 2020-21/ AY 2021-22.
What is Form 16 Format FY 2020-21/ AY 2021-22?
TDS Certificate number is included in Part A of Form 16.
Part A of Form 16
- Form 16 is updated till this date.
- Employee and employer names and addresses
- Employer’s PAN and TAN
- The employee’s PAN
- Time spent working for the company.
- TDS is deducted for the assessment year.
- TDS paid or credited in a quarterly summary
- TDS paid or credited in a quarterly summary
Part B of Form 16
- Employee’s gross pay plus allowances such as home rent expenses, leave travel allowances, and leave entitlements
- Deductions like 80C (EPF – Provident Fund , PPF, LIC, ELSS etc), 80D etc
- Total Taxable Earnings
- Total Tncome Tax.
- There is a 2% education cess, a 1% higher education cess, and a 1% healthcare cess.
- When an employee receives a pay in the form of arrears or advance, he or she is entitled to reimbursement under section 89.
- Deductions for entertainment expenses and employment taxes
- Finally, the total tax payable
Salary Structure in Form 16
Salary in Gross
The employee’s entire pay is defined as his or her gross salary. It comprises the base pay, any bonuses, overtime, incentives, and any additional sums before any deductions are done.
Basic Wage
It is the monthly set salary that a worker earns. It also comprises remuneration such as a gratuity, pension, advance paycheck, commission, and so on.
Perks
These are supplementary advantages offered by the employer, such as rent-free housing, rent concessions, and so on. It also covers costs paid by the company on the employee’s behalf, such as medical and educational expenditures.
Profits
The sum earned from a current or former employer as a bonus in conjunction with their departure. Salary from a different employer (s)
The present employer will include your prior employer’s pay in the Gross Salary. This is generally the situation when an employee changes employment or has numerous employers within the fiscal year.
LTA – Leave Travel Assistance
HRA is available to employees who are on vacation and travelling inside India alone or with family.
Workers will be reimbursed for their lodging fees. Salaried people who reside in rented housing can receive tax breaks on the amount of rent they pay each year.
Death-or-retirement bonus
For employees who are protected by the Gratuity Act of 1972. The amount that is tax-exempt is calculated using a specified formula.
Pension Commuted Value
For government workers and other workers who get an employer-provided commutable pension.
Employees get a retiring benefit in the form of the monetary equivalent of leave salary encashment. The sum that is tax-exempt is calculated using a specified formula.
Deductions under Section 16
Deductions for taxes are deducted from taxable income adjusted gross income. These deductions are available to employees depending on investments made and costs incurred throughout the fiscal year. These deductions contribute to a lower total tax obligation. The following are some of the most often applied deductions under Section 16:
Standard Deduction
It is a one-time reduction from your income. To receive the standard deduction, no evidence is necessary. The standard deduction for fiscal year 2018-19 is INR 40,000, while for fiscal year 2019-20, it is INR 50,000.
Allowance for Entertainment
Only government personnel are exempt. An entertainment allowance of up to Rs. 5,000 is permitted.
The Employment Tax
Professional taxation is another name for it. It is paid to the state government on behalf of employees by the business. It costs between INR 2,400 and INR 2,500 depending on state of employment.
Total Salary Earnings
Total Taxable Salary is calculated after subtracting allowances under Section 10 and collecting deductions under Section 16.
FAQ’S on Form 16 FY – Income Tax 2020-21/ AY 2021-22
Which ITR should I file if I have multiple Form 16?
You may submit ITR-1. ITR-1 forms are available to everyone who receives merely salary.
How to get Form-16 online?
Form 16 cannot be downloaded by a salaried individual. It can only be obtained through the deductor’s (employer’s) TRACES account.
What is the Form 16 salary limit?
Salary limit for issue of Form 16 is Rs 250,000/-.
Is Form 16 required for submitting a return?
Form 16 is required for salaried workers to file their yearly ITR. Salaried employees, on the other hand, can file their taxes even if they do not have a Form 16.
