Every salaried person in India pays a certain amount of money in the form of tax, out of their salary, to the Income Tax Department of India, a government institution. The IT-Department levies tax in two forms – Direct Tax and Indirect Tax. The Direct Tax is paid by every earning entity, including individuals, firms, businesses, companies, Hindu Undivided Family (HUFs), Body of Individuals (BOI) and Association of Persons (AOP).
The Income Tax is paid every year to the IT-Department at the end of each assessment year through an Income Tax Return Form (Form 16). For the financial year 2019-2020 (assessment year 2020-20210, the last date for general category of taxpayers has been extended till December 31.
If you paying the Income Tax Return for the first time, and are unsure about the procedure and details, we bring you a simplified explanation about Form 16 and everything else you need to know.
1. Form 16 or the Income Tax Return form, is provided by employers to their employees in order to fill the complete explanation of all their deducted tax in a financial year.
2. Any person, whose income from annual salary is above the basic tax exemption limit, the employer deducts the TDS from the pay and deposit it as ITR to the Indian government. However, no tax is deducted if the employee’s salary is below the basic tax exemption limit.
3. Form 16 or the Income Tax Return form is a document that has details about your taxable salary, a breakup of deductions under Section 80C, TDS (Tax Deducted at Source), an aggregate of Section 80C Deductions (including gross & deductible amount).
4. One also needs to fill information regarding TDS deducted by employer, PAN number, employer's PAN number, current Assessment Year, employer TAN Number, name and address of the employer and the complete name and address of the taxpayer.