The due date for filing the Income Tax Return (ITR) is fast approaching and the taxpayers have to file the ITRs before the due dates to avoid penalties. Many salaried taxpayers are fretting over not receiving Form 16 from their employers, which indeed is crucial for salaried individuals when filing their ITRs. It serves as a significant document as it provides detailed information about the salary paid to the employee, deductions claimed by the employee, and the tax deducted from the salary. This information is essential for accurately reporting income and claiming applicable tax benefits while filing the ITRs.
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For the assessment year 2023-24, the due date for filing Income Tax Returns (ITR) is July 31. Before submitting your ITR, one has to follow the key points in your Form 16
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Personal Details
Ensure that your personal information, such as your name, Permanent Account Number (PAN), and address, is correctly mentioned in Form 16.
You must check if your name is correctly spelt and matches the name on your PAN card and other official documents. Apart, your PAN – a unique 10-digit alphanumeric identifier, is correctly mentioned in Form 16. Any discrepancies could lead to issues during the filing process. Verify that your residential address is accurately stated in Form 16.
Salary Details
Verify the salary details provided in Form 16, including the gross salary, allowances, perquisites, and any other income components. Cross-check these figures with your records to ensure accuracy.
Confirm that the gross salary mentioned in Form 16 matches the salary credited to your bank account or as per your employment records. This includes your basic salary, allowances, and any other components. Also, the form must reflect details of the allowances you are entitled to such as House Rent Allowance (HRA), Travel Allowance, Medical Allowance, and others.
If any perquisites or fringe benefits are received from your employer, ensure that these are accurately mentioned in Form 16. Ensure that any other income components, such as bonuses, incentives, commissions, or any additional income sources, are properly accounted for in the form.
Deductions and Exemptions
Deductions and Exemptions are also very important. In Form 16 one has to check if the deductions claimed such as under Section 80C, Section 80D, and any other applicable sections, are correctly reflected or not. Also, confirm if any exemptions, such as House Rent Allowance (HRA), are appropriately mentioned.
Section 80C deductions
Ensure that the deductions claimed under Section 80C for investments such as Employee Provident Fund (EPF), Public Provident Fund (PPF), life insurance premiums, etc., are correctly mentioned in Form 16. Confirm that the total deduction amount claimed aligns with your actual investments.
Section 80D deductions
Check if the deductions claimed under Section 80D for health insurance premiums are accurately reflected. Verify that the premium amounts paid for individual, family, or parents’ health insurance policies are correctly reported.
Other deductions
Review any other deductions claimed under applicable sections such as Section 80G (for donations), Section 80E (for education loan interest), or Section 80TTA (for interest on savings account). Ensure that the deductions claimed match your actual eligible expenses and investments.
Exemptions
If you are eligible for any exemptions, such as House Rent Allowance (HRA), confirm that the exempted amount is correctly mentioned in Form 16. Verify that the exemption has been calculated as per the applicable rules and based on the supporting documents provided.
Supporting documents
Keep in mind that while Form 16 provides a summary of your income and deductions, it is advisable to maintain supporting documents and proofs for the deductions claimed. These documents may be required for verification during the assessment by the tax authorities.
TDS details
Review the TDS details in Form 16, including the TDS amount deducted by your employer and the corresponding TDS certificates. Access your Form 26AS, which is the consolidated statement of TDS available on the Income Tax Department’s website.
Compare the TDS amount mentioned in Form 16 with the TDS details reflected in your Form 26AS. Ensure that the amounts match, indicating that the TDS has been correctly reported and deposited by your employer.
If you notice any discrepancies or mismatches between the TDS amount mentioned in Form 16 and the TDS details in Form 26AS, it is important to address them. Contact your employer or the concerned authority to rectify any errors and ensure that the TDS details are accurately reflected.
Verification and Certification
Verification of Form 16 is an unavoidable part. You have to ensure that Form 16 is properly signed and certified by your employer. A valid signature and certification indicate that the form is authenticated by your employer.
The certificate should bear the employer’s Tax Deduction and Collection Account Number (TAN) and other necessary details. Also, confirm that the form pertains to the relevant financial year for which you are filing your ITR. The relevant financial year should be mentioned on the form, and it should align with the period for which you are filing your ITR.
Guidelines specified by the Income Tax Department;
TDS certificate form 16/16A:
Form 16/ 16A is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between the deductor and deductee. It is mandatory to issue these certificates to Tax Payers.
Additional Income
If you have any additional sources of income apart from your salary, ensure that these are properly declared in your ITR and reflected in your Form 16, if applicable. If you have any other sources of income, such as income from house property, capital gains from the sale of assets, income from investments, rental income, or income from freelance or consulting work. It is important to include all such income sources while filing your ITR.
Keep all relevant documents, such as rental agreements, investment statements, capital gains calculations, or any other proofs of income, to substantiate the additional income declared in your ITR.
Taxable Income and Tax Liability
Calculate your taxable income based on the details provided in Form 16. Then, determine the applicable income tax slabs and rates based on your taxable income. Calculate the tax liability using the respective rates for each slab. Check if the tax liability computed matches your calculations and the tax deducted by your employer.
You have to ensure the Accuracy in Form 16 by calculating your taxable income based on the details provided in Form 16 and cross-checking the tax liability with your calculations.
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