Form No. 16 means, a TDS Certificate issued by Employer or TDS Deductor to Salaried Employee.
Employer stating the details of the salary in prescribe format i.e. Basic, GradePay/AGP, D.A., HRA, CLA/TA/Conv. Allow., Special Pay, NHRA, City Allowance, Other Allow. if any, which are to Employee from the month of March to February in the Current Financial Year. And Tax deducted as TDS on monthly Earned Salary to the Central Government.
Important Notes while issuing Form 16 by TDS Deductor:
- If employer has issued Form 16, then he has certainly deducted TDS.
- The certificate mentions the name of the bank & branch, BSR code, date of deposit of tax, serial no. of challan and amount of tax.
- That is the purpose of the certificate. It is not possible to ascertain the accurateness of the tax calculation with the data provided.
TDS From Salaries (section 192).
The TDS is based on the tax at the applicable rate on the estimated income of employee for the year. Employer must not deduct TDS on all the non-taxable allowances like conveyance allowance, rent allowance, medical allowance.
- The deductible investments under sections like 80C, 80CC, 80D, 80DD, 80DDB, 80E, 80GG and 80U. No tax is required to be deducted from source unless the estimated salary exceeds the amount not chargeable to tax.
- The employer can increase or decrease the amount to be deducted to make the adjustments for any previous deficiency or excess deduction.
