To govern the income tax and returns, the income tax act 1961 and income tax rules 1962 prevail in India. The form 16 of Income tax is a certificate or a document imperative for the income earning individuals in India. It is a document which carries necessary information about employee filing returns with the income tax department of India.
The employer provided the form 16 to his employee showing the proof of filing returns with numerous salary components of the employee. These components are the name, PAN details and other personal details of the employee. It also prevails the particulars of the employer such as name, PAN details, TAN, Tax deduction, etc. This works as an acknowledgement of the number of taxes paid by the company.
The part A of the of Form 16 contains relevant information about the employer and the employee which include TAN and PAN of the employer and PAN of the employee. It also states the addresses of both of them. It has details of the pay-outs employer have made throughout the financial year to the employee. Further, it contains information about the TDS filed by the employer, taxes deducted from your salary and paid every quarter as well as the monthly statement of the same.
The part B of Form 16 contains a detailed summary of the salaries given to employees during the financial year. The income is shows with a breakdown of details to deductions made by the worker U/s 80C.
Under this section, the deductions on EPF, Life insurance premium, NSC, PPF and much more are mentioned. In the case of a change in jobs, the form 16 will indicate the same about both the companies.
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