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When is a 16 required Form: What You Should Know

Note : When Form 16 is issued annually, the period for filing returns will remain one month until the 31st ofĀ  May. What is Part A? The first part of Form 16 provides all details of the employee's tax deductions including the tax rate, theĀ  amount of tax deducted, the source of the deduction, payment made and date of the receipt. The nextĀ  part of Form 16 is the Employer's Information Sheet on Benefits, which explains the benefits that anĀ  employee would be entitled to get and the filing rights they have in the case of their employees getting benefits. FormĀ  16A is a similar form, issued on a quarterly basis. When Should You File Form 16? For the next 7 Years For employees who are working in the service of another for more than one year, it is mandatory to issue Form 16, asĀ  well as the Form 16A. The reason is that under the present tax system, employee's benefits are not taxed and employers should notĀ  have to incur any further expenses at their end. It seems that a similar system is needed in the future if the presentĀ  tax system is to be maintained. Who Should File a Form 16? Forms 16A and 16b can be used byĀ  individuals who are employed in the service of another, as well as company employees. They may or may not getĀ  the benefits mentioned above. A Business Employer Should Issue the Form 16A In case the business employer is self-employed, they should issue Form 16A on a quarterly basis. If they areĀ  part of an Enterprise, they should issue Form 16B. Employees residing in the same company should issueĀ  Form 16A, except if they are resident in a different company as mentioned above. What Are Your Rights? Employees issued Form 16A will have the same rights in case of non-payment of tax as if they were employed by theĀ  business employer themselves. However, there might be some additional benefits that can be claimed by theĀ  employee which will be discussed later. For example, Form 16B provides for provision of medical benefits for the same company employees. Form 16B can not beĀ  used for pension or other pension funds that were issued to their employers.

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