What is Form-16 and its significance in filing income tax return?

As the season for filing Income Tax Returns kicks off, employees can expect to receive their Form-16 from their respective employers. This document holds immense significance for salaried taxpayers as it streamlines the process of filing their Income Tax Returns (ITR). Let's delve into what exactly Form-16 entails and why it holds such importance.

Form-16 plays a crucial role in the ITR filing process, as it provides essential details about an employee's salary, deductions claimed, and Tax Deducted at Source (TDS) by the employer. As per Section 203 of the Income Tax Act, companies are obligated to furnish Form-16 to their employees, encompassing comprehensive information regarding TDS deductions made on their income.

With companies commencing the distribution of Form-16 from June 15, it is advisable to promptly file your income tax return rather than wait until the deadline approaches. The deadline for filing ITR this year is July 31, 2023, without incurring any penalty. Avoid the last-minute rush that often causes technical glitches due to increased traffic on the portal.

Before proceeding with ITR filing, it is essential to carefully examine the details presented in Form-16. It is recommended to complete this review well in advance. Verify if your Form-16 accurately reflects all the allowances, such as House Rent Allowance (HRA) and Leave Travel Assistance (LTA), which are vital components. Additionally, consider these five critical aspects before initiating the ITR process.

Key points to consider:

1. Ensure the correctness of your PAN number as any errors could lead to complications in claiming an Income Tax Refund.

2. Verify your name, address, and the company's Tax Deduction and Collection Account Number (TAN) mentioned in Form-16.

3. Cross-check the tax deductions mentioned in Form-16 with Form-26AS and the Annual Information Statement (AIS).

4. If you have opted for the Old Tax Regime, meticulously review the details of tax-saving deductions.

5. If you changed jobs during the financial year 2022-23, ensure you obtain Form-16 from your previous employer as well.

By adhering to these guidelines and giving due attention to the details in Form-16, you can smoothly navigate the process of filing your Income Tax Return and fulfill your obligations as a taxpayer.