Content of Form 16

Form 16 consists of two main parts, i.e. Part A and Part B. These parts contain specific information about the employee’s income, taxes deducted, and other relevant details.

A. Part A of Form 16

Part A of Form 16 contains information on TDS deducted and deposited quarterly, as well as the employer’s PAN and TAN. Employers can generate and download this section of Form 16 using the TRACES ( https://www.tdscpc.gov.in/app/login.xhtml ) interface.

Part A of Form 16 consists of:

• Name and Address: The name and address of the employer and the employee are mentioned.
• Permanent Account Number (PAN): Both the employer’s and employee’s PAN are provided.
• Tax Deduction and Collection Account Number (TAN): The employer’s TAN, which is used for TDS filing, is mentioned.
• Period: The financial year for which the Form 16 is issued (e.g., April 1st to March 31st).
• Summary of Salary: This section includes details of the gross salary, which comprises basic salary, dearness allowance (if applicable), and any other allowances. It also shows any exempt allowances, if applicable.
• Tax Deducted: The total amount of tax deducted at source (TDS) by the employer is specified in this section.

B. Part B of Form 16

Part B of Form 16 serves as an attachment to Part A. The employer is responsible for preparing Part B for its employees, which comprises the breakdown of salary and deductions authorized under Chapter VI-A. If you change jobs within the same fiscal year, you must collect Form 16 from both employers.

Part B of Form 16 includes the following :

• Detailed Breakup of Salary: Part B gives a detailed breakdown of the different parts of the salary, such as allowances, perks (if any), and deductions.
• Allowances: Various allowances are listed, along with their exempt and taxable portions, such as house rent allowance (HRA), leave travel allowance (LTA), medical allowances, and so on.
• Deductions: This section includes details of deductions claimed by the employee, such as contributions to the Provident Fund (PF), professional tax and other deductions allowed under the Income Tax Act.
• Other Income: If the employee has any other sources of income apart from the salary, it is mentioned here.
• Total Income: The total taxable income, after considering exemptions and deductions, is calculated in this section.
• Tax Calculation: The income tax payable by the employee is computed based on the total income and applicable tax rates. Any tax already deducted (TDS) by the employer is subtracted from the calculated tax.
• Relief under Section 89: If there is any relief claimed under Section 89 of the Income Tax Act (pertaining to arrears or deferred salary), it is mentioned here.
• TDS Details: The breakup of TDS on salary, along with the TDS certificate number, is provided.

Form 16 is a certificate issued by an employer to its employees, explaining the income that was earned by the employee during a financial year (typically from April 1st to March 31st), and the taxes deducted at source (TDS) by the employer on behalf of the government. In basic terms, it is a document that offers information on the salary one has earned and the taxes that have been deducted from it.