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Understanding Form-16 in a Simple Way

Understanding Form 16 (In a Simple Way) H&R BLOCK YOUR TAX EXPERT We all know that it is needed for TAX FILING. Now let's understand its components! Here's a quick view of what form 16 is all about What is form 16? A certificate issued by the employer to employee stating the details of income earned and the tax deducted on their behalf. This is paid to the government. Form 16 is divided in two parts - Part A and Part B. • Part A is the certificate of TDS proving TDS is deducted by the employer • Part B is annexure containing details of salary paid, other income, tax due and tax paid. FORM 16 It contains details like PAN Stands for Permanent Account Number, a 10 digit alpha-numeric code generated by the I.T. Department of India. The tax department has made it mandatory for everyone. PAN of the Deductor AGRTL0443L TAN Visible in the first half part A Tax Deduction and Collection Account Number, a 10 digit alpha numeric number, required to be obtained by all persons/companies who are responsible for deducting or collecting tax. TAN of the Deductor KARA0788AF Gross Salary This refers to the employee's total remuneration including allowances, overtime pay, commissions, and bonuses, and any other amounts before any + + + Gross Salary Allowances Overtime Commissions Bonus Other Pay deductions are made. Perquisites Perquisites are nothing but the perks you enjoy like Rent Free accommodation, Loans at a subsidized rate to employees etc. LOAN e low interest rate Allowances A payment made by employer to an employee to enable him/her to meet certain cost of expenditure incurred on behalf of the employer like Medical Allowance, Travel Allowance etc. Examples of some allowances • House Rent Allowance • A special allowance given to an employee to meet his rent expenses. • Medical allowance is paid by the company to cater the amount spends by employee on medical treatment and medicines. Income from house property ON RENT Income from rent of let out house property or where the house is self-occupied then loss from house property for interest paid on housing loan. Gross Total Income Total income from all sources before claiming section 80 deductions Deductions Gross Total Income An aggregate of deduction from sections 80C to 80U are listed in this section of Form 16. O Income O Deductions Total Income This is the total income subject TAX to tax or taxable income. Tax on total income and education cess Tax on total income is caloulated and education cess is also levied on it. Education cess is a contribution towards Secondary and Higher Education development in the economy. All taxes in India are subject to an education cess.

Understanding Form-16 in a Simple Way

shared by rahulteawari on Apr 29
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Form 16 is the most important document issued by the employer to the employee and is often also referred to as a salary certificate. Since it acts as a proof of income earned and TDS deducted and paid...

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