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Thursday, June 8, 2017

Your wait for TDS certificate gets longer: Last date for employers to issue Form 16 extended

The last date for the employers to furnish the Form 16 has been extended to June 15. Earlier as per the income tax rules, the last date by which the employers were supposed to furnish the Form 16 to the employees was May 31 of every year.

The ministry of finance notification has amended the income tax rules and the new date will hold for every year from here on. The notification can be accessed by clicking here . So, the time has come for your employer to inform you about the taxes deducted in the previous year i.e. for the financial year 2016-17, latest by June 15, 2017.

For the salaried individual, Form 16 is an important document that shows how much of salary income has the received, how much of deduction the employee has availed of and how much of tax has been deducted by the employer during the financial year.

The tax deducted each month by the employer is the tax deducted at source (TDS) and deposited to the government on behalf of the employee.

The income tax Act mandates everyone who deducts TDS to issue a certificate to the individual. Under section 203 of the Income-tax Act, 1961, the employer is mandated to issue Form 16 to the employees showing the total TDS on income.

Penalty for employer 

It is compulsory for the employer to furnish Form 16 to the employee, whether it is the present or any previous employer. "Under section 203 of the Income Tax act, 1961 read with rule 31 of the income tax rules 1962, it is mandatory to furnish." But, what if the employer fails to do so? "Under section 272A (2) (g) of the Income Tax act, employer is liable to pay the penalty," says Archit Gupta, founder & CEO
In case the employer has not provided the Form 16 to the employee by the due date and delays it, there are penalties in place too. Gupta says, "If the employer fail to furnish the form 16 within the due date, he is liable to pay a penalty of Rs.100 per day of default till he issues the form. However, penalty will not exceed the amount of tax deductible." 

What to do if not received 

At times employees find it difficult to collect the Form 16 from previous employers and sometimes even from the present ones. "The only remedy in case employer refuse to issues Form 16 is to complain to the concerned assessing officer in writing, who will take appropriate action or initiate penalty proceedings against the employer. The employee, however, has no other legal remedy against his employer in case he refuses to issue the certificate except to intimate about such default to concerned assessing officer, who may take appropriate action or initiate penalty proceedings against the employer." 

What all is there in Form 16 

Form 16 is a summary of the total amount paid to the employee and the TDS on it. 

There are two parts in Form 16- Part A and Part B. While the basic information of the employer and employee, like name, address, PAN and TAN details, period of employment with the employer, summary details of TDS deducted and deposited with the government are captured in the Part A, the Part B includes Income chargeable under the head 'Salaries', any other income reported by employee, the various deductions under Chapter VI-A such as section 80C, Section 80D etc. 

Lastly, it will carry the figures for total income (earned during the previous year) and the tax applicable on it. "Part A must be generated and downloaded through Traces Portal. Part A of the Form 16 also has a unique TDS Certificate Number. Part B is prepared by the employer manually and issued along with Part A," says Gupta. 


In addition to the salary income, an employee may have other income too. Once you have received the Form 16 but had not declared any other income to the employer( and therefore no TDS was deducted on it), you may show it while filing the income tax return, the last date for which currently stands at 31st July. 

Source:-The Economic Times

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