Deadline to issue Form 16 extended: All you need to know

 







The government extended deadlines for various income tax compliances last week, including Form No.16, which is required to be furnished by the employer by July 31. The certificate of Tax Deducted at Source or TDS in Form No.16, required to be furnished to the employee has been extended till July 31, from July 15, 2021.

"In view of the impact of the Covid-19 pandemic, taxpayers are facing inconvenience in meeting certain tax compliances and also in filing response to various notices. In order to ease the compliance burden of taxpayers during this difficult time, reliefs are being provided...," the Central Board of Direct Taxes (CBDT) said in a statement.

The Finance Ministery said in a statement, "The Certificate of Tax Deducted at Source in Form No.16, required to be furnished to the employee by 15th June 2021 under Rule 31 of the Rules, as extended to 15th July 2021 vide Circular No.9 of 2021, maybe furnished on or before 31st July 2021".

Form-16 is a TDS Certificate that lists all your taxable income and various tax deductions at source (TDS). It is is one of the most essential documents required for filing an income tax return. It is essentially a certificate employer issues their employees. It validates the fact that TDS has been deducted and deposited with the authorities on behalf of the employee.

Form 16 is issued by an employer and it contains the information you need to prepare and file your tax return. Form 16 has two components – Part A and Part B.

Components of Part A are:
Name and address of the employer
PAN of employer
PAN of the employee
Tax Deduction Account Number (TAN) of the employer
Period of employment with current employer
Summary of tax deducted & deposited quarterly, which is certified by the employer.

Part B is an annexure to Part A. If you change your job in one financial year, then it is for you to decide if you would want Part B of the Form from both the employers or from the last employer.

Components of Part B are:
Detailed breakup of salary
Detailed breakup of exempted allowances under section 10
Deductions allowed under the income tax act

It is worth noting that while Form 16 is important for filing income tax return, it does not mean that Form 16 is necessary for filing ITR. If you do not have form 16 then you do not need to worry. You can still file your ITR without Form 16. In case you lose your Form 16, you can request for a duplicate from your employer. If you change your job in one financial year, every employer will issue a separate Part A of Form 16, for the period of employment.

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