What is the requirement of Income Tax Form 16 to salaried persons? With Automated Master of Form 16 Part B for F.Y.2017-18 and A.Y.2018-19

What is Form 16?

Form 16 is an Income Tax form used by companies to provide their salaried individuals in India. This form carries all the required details that help the employee in filing their tax returns with the Income Tax department in India. The Income Tax Act of 1961 and the Income Tax rules of 1962 are the laws that are prevailing in India. When Form 16 is provided to an employee by their employer it’s a source of proof of filing their Income Tax Returns, the form has various components such as Salary Income components of the employee. Every employer should provide their employees with the Form 16 who fall under the tax brackets set up the Finance Ministry of the Government of India. If an employee doesn’t fall under the tax brackets set, then he/she doesn’t receive the Form 16 as he/she will not need to pay taxes neither will they need to have Tax Deducted at source or TDS.

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These components are:

·                          The personal details of the employee, like name, Permanent Account Number (PAN) etc.

·                          The employer details, name, PAN, Tax deduction and collection Account Number (TAN), etc.

·                          An acknowledgment number of the taxes paid by the employer.

·                          Details of the salary; Gross salary, net salary, deductions, perks etc.

·                          Total income and tax deductions.

·                          Education cess and surcharge details.

·                          Taxes deducted as per sections 191A.

·                          Declaration of tax payments from the employer.

·                          Refunds in any to the employee, or balance of taxes payable by the employee.

·                          Receipt of the TDS paid.

·                          All details of the Tax Payment, like Challan number, cheque number, Demand Draft number etc.

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Form 16 has 2 parts, Part A and Part B:

The Part A of Form 16 contains the TAN of the employer and PAN of the employer and the employee. The addresses of both the employee and employer. This will contains all details of the pay-outs from the employer and employee during the current financial assessment year. This part of Form 16 also contains the TDS filed by the employer, the taxes deducted from your income and paid to the government every quarter. This also contains a monthly statement of the same.

The Part A of the Form must include:

·                          TDS deducted by the employer.

·                          PAN of the employer.

·                          The current financial assessment year.

·                          The employee PAN.

·                          TAN of the employer.

·                          The employee/tax payer's name, address etc.

·                          Name and address of the employer.

The Part B of Form 16 contains the consolidated details of the salaries paid to the employee during the financial assessment year. The salary must be broken down, with details of deductions made by the employee under section 80C. The deductions that can be made under this section is EPF, NSC, Life insurance premiums, PPF, etc. If in one financial assessment year employee has changed jobs then the employee needs to be provided Form 16 of both companies.

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The Part B of the Form must include:

·                          Taxable salary of the employee.

·                          TDS by the employer.

·                          Breakup of the deductions of sections 80C.

·                          Aggregate of the section 80C with a gross and deductible amount.

·                          Tax refund or any payables due.

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As per Latest Finance Budget 2017 the Section 80,Plus Automated Income Tax Calculator (All in One) for West Bengal Govt Employees for F.Y 2017-18 & Ass Year 2018-19

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A. Section 80C:- Entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,50,000/-

(1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual.

(2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;

• New Introduce Kissan Vikas Patra (K.V.P.) U/s 80 C (From FY 2014-15)
• Provident Fund
• Saving certificates
• Unit-linked insurance plan of the LIC Mutual Fund referred to section 10 (23D) and as notified by the Central Government
• Any sums paid by an assessee for the purpose of purchase or construction of a residential house property
• Tuition fees
• Term deposit for a fixed period not below 5 Years
• Deduction in respect of contribution to certain pension funds (Section 80CCC)
• Deduction in respect of contribution to pension scheme of Central Government & Private Employees also( Passed by the Central Finance Budget)

(Section 80CCD):  Section 80CCD(1) allows an employee, being an individual employed by the Central Government or any other employer, on or after the 01.01.2004, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide Notification F. N. 5/7/2003- ECB&PR dated 22.12.2003 or as may be notified by the Central Government. However, the deduction shall not exceed an amount equal to 10% of his salary(includes Dearness Allowance but excludes all other allowance and perquisites).

As per Section 80CCD(2), where an employee receives any contribution in the said pension scheme from the Central Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 10% of his salary of the previous year.

However, if any amount is standing to the credit of the employee in the pension scheme referred above and deduction has been allowed as stated above and the employee or his nominee receives this amount together with the amount accrued thereon, due to the reason of

(i) Closure or opting out of the pension scheme or

(ii) Pension received from the annuity plan purchased and taken on such closure or opting out then the amount so received during the FYs shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax. Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.

Further, it has been specified that w.e.f 01.04.09 that any amount received by the employee from the new pension scheme shall be deemed not to have received in the previous year if such amount is used for purchasing an annuity plan in the previous year.

It is emphasized that as per the section 80CCE the aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD(1) shall not exceed Rs.1,50,000/-. However, the contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs.1,50,000/- provided under this Section. In this Finance Budget 2014, the Non-Govt employees also entitled to get the benefits U/s 80CCD.

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