Income tax returns (ITR) are filed during every assessment year, wherein you declare your income from different sources and calculate your tax liability for the financial year. The ITR contains the details of your income, the deductions and exemptions availed on them, like life insurance premiums and benefits. Tax liability is calculated depending on your tax slab.
Filing income tax return has been made online, wherein you can file your tax return directly through the portal of the income tax department. If you are a salaried employee, your Form 16 issued by the employer can serve as an important document in filing your ITR. Let’s understand how –
What is Form 16?
Form 16 contains Part A, Part B and Form 12BA.
As per section 203 of the Income Tax Act, 1961, an employer is mandated to issue Form 16 to the employee, showing the total TDS that is deducted on income1. The employer deducts TDS from the employee’s salary and deposits the TDS to the government on behalf of the employee. Form 16 Part A contains the details of this TDS deducted, i.e., the date of deduction, the amount of deduction, etc.
Besides the details of the TDS, Form 16 Part B contains gross taxable salary which contains taxable salary, taxable perquisite as per Form 12BA.
Form 12BA contains the details of the salary of the employee, i.e., the breakdown of the salary structure, taxable perquisite and tax free allowances.
Form 16 is also known as the Salary TDS Certificate and serves as an income proof in financial transactions.
How does Form 16 help in filing ITR?
Since Form 16 contains the details of your salary income and the TDS already deducted from the same, it further simplifies the tax filing process. It shows you the aggregate salary income, exempt allowances and taxable salary which should be charged under the head ‘Income from Salary’. Moreover, when you calculate your overall tax liability, you can account for the TDS already deducted from the salary income. This can help you determine whether you have any additional tax liability or you are eligible for a refund.
How to file an income tax return using Form 16?
Now that you know what form 16 is and its importance in tax filing, let’s understand the process of filing your ITR using it. The process starts with logging into your account on the e-portal of the income tax department. If you are a first-time taxpayer, you would have to register yourself with your PAN, before starting the tax filing process. Once you are logged in into your account, here’s how you file your returns2 -
For the offline mode, you would have to download the applicable ITR from the income tax portal. Fill out the form offline and save the XML file that will be generated. Then upload the saved XML file to your account. To do so, you would need to download either the Excel Utility or the Java Utility. Here’s the step-by-step process –
- Visit https://www.incometax.gov.in/iec/foportal/. Click on ‘Downloads’ and then on ‘IT Return Preparation Software’.
- Download the ZIP file and extract the utility.
- Fill in the relevant fields in the ITR using Form 16 and the deductions that you can claim for life insurance premiums and other Sections.
- Validate the entries and calculate your tax liability.
- Generate the XML file and save it
- Then log into your account on the income tax portal and go to ‘e-file’. Click on ‘Income Tax Return’.
- Choose the assessment year, ITR form number, and type of ITR filing (original or revised), and choose the submission mode for your ITR as ‘Upload XML’.
- Choose from the given options to verify your ITR and click on ‘Continue’.
- Attach the XML file and submit your ITR.
You can file applicable ITR form online. You can use the information from Form 16, to enter the details directly on the portal and file your returns. The process is as follows –
- Log into your account. Go to ‘e-file’ and choose ‘Income Tax Return’.
- Your PAN number will be auto-populated. Select the assessment year, the form number of your ITR, and the type of ITR filing (original or revised), and choose the submission mode as ‘Prepare and Submit Online’.
- Click ‘Continue’ to proceed.
- Fill up all the relevant fields using the information from Form 16 and other documents that you have.
- Go to the ‘Taxes Paid and Verification’ tab and choose the desired verification mode.
- Click on ‘Preview and Submit’ to check your ITR and then submit it online.
Once return is submitted online, the return needs to be e-verified. E-verification can be done by multiple modes. Refer https://eportal.incometax.gov.in/iec/foservices/#/pre-login/eVerifyReturn-bl for e-verification of ITR.
So, file your returns on time using Form 16 and any other forms that you have at your disposal that show your income, TDS detail, etc. Employers usually issue Form 16 to all employees. However, if you have not received it, you can ask the employer to issue one or file your ITR without it if you are aware of the details of Form 16.