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Form 16 and 26AS

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As the Income-tax return (ITR) filing season is approaching, the importance of getting critical documents for filing taxes cannot be overstressed. While depending upon your unique requirement, the list of tax-related documents you need might vary in the following two sections, Form 16 and Form 26AS, which can help a salaried employee file his/her taxes with ease.

Form 16
Form 16 is a necessary form under section 203 of the Income-tax Act 1961, issued by the employers to their employees. It provides tax deducted at source (TDS) from income under the head “salary”. This form confirms that TDS has been deducted, and the same has been deposited to government authorities on the employee’s behalf.

If you have disclosed income from other heads and your employer, they will consider your total income for TDS deduction. This form has been issued by 15th June after every financial year in which the tax has been deducted. This form includes such information which you all need to prepare and file your income tax return.

Form 16 is segregated into two parts:

Part A
It includes employer and employee information like name, address, PAN and TAN, period of employment and summary of TDS deductions.

Part B
It includes the details of salary paid and other income reported by you, deductions allowed under various sections, tax payable, etc.

Eligibility criteria
Every salaried individual who falls under the taxable bracket is permitted for form 16. The employer is not obligated to provide this form if an employee does not fall under the taxable bracket.

Form 26AS
Form 26AS is a consolidated annual statement that gives details of tax credits against the PAN of the taxpayer. It provides details of income as well as taxes that the deductor has deducted. This form indicates that the tax has been deducted, and the same has been submitted to the government.

TDS provided in Form 16 can be cross-checked through Form 26AS. TDS mentioned in both the form must be the same. In case of any deviation, the IT department will consider figures as per Form 26AS. It would help if you asked your deductor to correct the error. It includes:

  • Information regarding TDS deducted by the deductor
  • Information about TCS collected by the collector
  • Advance tax paid by the assessee
  • Self-assessment tax payment
  • Details of the refund received during the last financial year
  • Details of high-value transactions in respect of mutual fund, shares, etc.

Parts of Form 26AS:
Part A: Details of TDS

  • Part A1 – Details of TDS for Form 15G/ 15H
  • Part A1 – Details of TDS on sale of immovable property u/s 194IA (for seller)

Part B: Details of TCS

Part C:  Details of taxes paid (other than TDS or TCS)

Part D: Details of paid refunds

Part E: Details of AIR transactions (high-value transactions)

Part F: Details of TDS on sale of immovable property u/s 194IA (For buyer)

Part G: TDS defaults

Precautions for the taxpayer while filing ITR
Before filing ITR, the taxpayer must reconcile the TDS certificate, i.e. Form 16 or 16A, with online tax credit available in the 26AS annual statement. If TDS amounts vary, the taxpayer should first appeal to the employer to correct non-compliance. If the same has not been compiled, intimate this fact to the employers’ jurisdictional income tax officer and file the ITR in time without concern about compliance from the employer. If intimation is received from the income tax office later, the taxpayer should rectify the error u/s 154 and provide Form 16 with his written efforts to make the employer comply with his duties

At AJSH, we assist our clients in dealing with various income tax compliances, including income tax assessments, ITR filings, TDS returns, tax advisory and other related services by providing them adequate support and guidance from our end. If you have any questions or wish to know more about Form 16 and 26AS, kindly contact us.

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