If you’re filing your taxes for the first time, you must be confused about the various Form 16 types. While Form 16 is issued exclusively to salaried taxpayers by their employers, Form 16A and 16B are not so exclusive.
Also known as an annual salary certificate, Form 16 outlines the details of your salary earned during the year and the TDS collected. Form 16 proves that the company has deducted TDS and deposited the same with the government.
In keeping with Section 203 of the Income Tax Act, every employer has to issue this TDS certificate for salaried employees earning above a certain threshold. Employers can fill in and download Form 16 from the TRACES website with their user ID, password, and deductor TAN. Once downloaded, you can use this comprehensive revenue certificate to file your taxes and claim refunds, if applicable.
Apart from making the tax filing process easy, Form 16 is also deemed proof of income. Banks and other financial institutions use Form 16 as income proof to sanction higher credit limits or loan amounts. Form 16 may also be needed when joining a new company and is helpful during VISA applications.
Form 16, Form 16A, or Form 16B, which one should I file? If you’re still confused about Form 16 types, check out the following.
Now that you know everything about Form 16 types, you can easily file your ITR. Once you’ve done that, you can open a salaried account with Fi Money to maximise your savings and investments. On the Fi Money app, you can open a zero-balance salary account in minutes and enjoy smarter budgeting, expense analysis, commission-free mutual fund investments, and more.
You can obtain Form 16 from your employer. Even if you’ve left a job, you’re eligible for Form 16 from your previous employer.
Form 16 can only be generated by an employer. If you’re an employer, you can generate form 16 by following these steps:
Go to the TRACES website.