The financial year ended in March and individuals are frantically trying to file their tax returns by the due date of July 31st. If you are a salaried employee, you must have received Form 16 from your employer. This is a very important form, which is required when you are filing your taxes yourself or if you are taking professional help for the same. Being a salaried employee, you should be conversant with the meaning of Form 16. But, what if you are not? What if you are a new employee still grasping at financial straws to make sense of filing your taxes? Wouldn’t you need help?
Of course, you would! So, let’s understand what Form 16 exactly is.
Employers generally deduct TDS from your salary. In that case, the Income TaxAct mandates your employer to issue a certificate detailing the TDS deducted and deposited. Thus, Form 16 is that certificate which your employer issues detailing your taxable income and the TDS already deducted.
Why is Form 16 required?
The form contains the details of the TDS already deposited by your employer, so it helps you in the estimation of your correct tax liability.
What if you don’t have Form 16?
Though it is highly improbable, you might not get Form 16 from your employer due to unavoidable circumstances. This does not, however, mean that you cannot file your taxes correctly. Taxes can be filed even without a Form 16 if you know how. So, here are the steps which can be followed for filing your Income Tax Returns even if you don’t have a Form 16.
Filing income tax without Form 16
Step 1 – Accumulate all your payslips
While Form 16 lists your taxable income, the same can be found out from your Payslips as well. So, start by collecting your Payslips to figure out what your taxable income actually is.
Step 2 – Make use of Form 26AS
Form 26AS is an annual statement which shows your tax related information. It highlights the tax received by the Government through TDS deducted on your incomes from all sources. Your Payslips show the salary you received and Form 26AS shows the TDS already deducted from the salary. Both these documents can be used to find out the tax your employer deducted by way of TDS.
Step 3 – Compute and claim your deductions
There are various types of deductions which you can claim from your salary income. These are non-taxable items which lower your taxable income and include House Rent Allowance, Leave Travel Allowance, reimbursements, Section 80C deductions on investments, etc.
Step 4 – Add income from all other sources
Besides your salary income, you might have income from other sources as well. For instance, you might have interest income from your savings bank account or Fixed Deposit account, gains from shares and mutual funds, rent income, capital gains, etc. Add up these incomes to your salary income if they are taxable.
Step 5 – Identify the tax filing form
You should know which tax form should be perused if you are filing your taxes yourself. As a salaried employee, the relevant tax forms for you include ITR 1, ITR 2, ITR 2A, Form 3, Form 4 and Form 4A. Use the relevant form for filling up your income details. If you are using ITR 2, ITR 2A and ITR 4, you would have to provide a detailed salary break-up showing allowances and perquisites and whether or not they are taxable.
Step 6 – Compute your tax liability
After you have followed the above steps, you would have the numbers to calculate your tax liability. The next step, therefore, would be to find out what is your actual tax liability. Compare the figure with the TDS already deposited. If your TDS deposition is higher than the actual tax liability, you can claim a tax refund. On the contrary, if your tax liability is higher than the TDS deposited, you would have to pay additional tax.
Step 7 – File your return
After filling up the ITR form, submit it and file your return by July 31st.
Source: Times Of India