What Is Form 16 And Form 26AS?

If you are a salaried person, you must be well familiar with the Form 16. If you understand the Form 16 thoroughly, you can easily file ITR (Income Tax Returns). What is Form 16? It’s nothing but a certificate, which gives information on the tax deducted at source (TDS) from your income, under the head, salaries.

In simple terms, it gives details of the tax deducted by your employer. Form 16 is the income certificate issued to you by the employer.

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What Is Form 16 And Form 26AS?

1. What is Form 16?

Form 16 has 2 parts:

Form 16 Part A:

Form 16 Part A gives the summary of TDS deduction. This summary can be on a quarterly/monthly basis.

• Your (employees) name and address.
• Your employers name and address.
• Your employers PAN and TAN Number.
• Your PAN details.
• The Assessment Year (Assessment year is the year in which the tax liability is calculated for the year in which you earn the income which is the previous year).

Example: If Financial Year is 2017-18, then Assessment Year is 2018-19.

• Form 16 Part A also gives the period of employment. If you have worked for 2 or 3 Companies in a financial year, you would have multiple Form 16’s.

Form 16 Part B:

• Income under the head ‘Salary’. This includes allowances and deductions like LTA, HRA, and Professional Tax and so on.
• Gross Income is salary income and any other income. Other income could be interest income or capital gains.
• Deductions like Section 80C, Section 80CCC, Section 80CCD where you enjoy a maximum deduction up to Rs 1.5 Lakhs a year.
• Deductions like Section 80D (Health Insurance Premiums), Section 80E (Interest on education loan), Section 80G (Donations to charitable institutions). To claim these deductions, you must submit investment proofs.
• Gross Income – Chapter V1A deductions. This gives the taxable income.
• If your employer deducts TDS, then this amount is subtracted from total tax liability.

SEE ALSO: Submit Form 15G and Form 15H To Save Tax

2. What is Form 26AS?

Your employer deducts TDS from salary and other income. This amount is deposited with the Income Tax Department. How do you know that your employer has deposited the money with the tax department?

This is why you need Form 26AS. Form 26AS is a form which shows you that TDS deducted from salary, has been deposited with the Government.

Form 26AS gives details of TDS deducted from salary, banks and so on. You must check if the TDS deductions in Form 16, match with the TDS deductions shown in Form 26AS. They must be the same.

SEE ALSO: View Form 26AS Before Filing ITR

3. What happens if TDS in Form 16 does not match with Form 26AS?

The Income Tax Department considers the TDS figures from Form 26AS. So if the employer has updated your PAN wrongly, TDS will not reflect in Form 26AS. Make sure your employer rectifies this error. Be Wise, Get Rich. 

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