Compare Form 16 and 26AS, alert employer promptly to fix errors

Employers have begun to or will soon issue Form 16, as they are mandated to do so by June 15.

- HIMALI PATEL

Salaried individuals must understand how to use this document effectively while filing their income-tax returns (ITRs).

Its significance
Form 16 is a key document for salaried individuals. "It serves as an essential certificate of tax deducted at source (TDS) on salary income by the employer," says Suresh Surana, a Mumbai-based chartered accountant. It consolidates salary income, deductions, and taxes. "It simplifies the tax filing process by making all the relevant data readily available," says Shefali Mundra, tax expert at ClearTax. Form 16 comprises Part A and Part B. Part A contains the employer's tax deduction account number (TAN), the employee's permanent account number (PAN), and a quarterly summary of salary paid and TDS deposited.

Part B includes a breakdown of salary, allowances, perquisites, and deductions under Chapter VI-A (e.g., Sections 80C, 80D, etc.). "It also reflects the computation of total income and tax liability based on applicable slabs," says Surana.