Form 16 (Part B): New Procedure, Format and Standards for Issuance

The provisions of Income tax Act, 1961 require an employer to file statement of tax deduction at source (TDS) with respect to its employees in Form 24Q, providing therein details of tax withheld in respect of his employees. Additionally, the employer is required to furnish certificate of TDS in Form 16 to its employees specifying there in the details such as amount of salary, TDS, Permanent Account Number (PAN) of the employee, Tax deduction and collection Account Number (TAN) of the employer, etc. Form No 16 has two parts viz. Part A and Part B (Annexure). Part A contains details of tax deduction and deposit and Part B (Annexure) contains details of income.

form 16

Recently, Central Board of Direct Taxes (CBDT) has amended ‘Part B (Annexure) of Form 16’ and ‘Annexure II of Form 24Q’ via Notification No. 36/2019 dated 12.04.2019.Now, to implement these changes, the Directorate of Income-tax (Systems) via Notification 9/2019 has specified the procedure, formats and standards for the purposes of generation and download of certificates from “TDS Reconciliation Analysis and Correction Enabling System” or (https://www.tdscpc.gov.in) (hereinafter called TRACES Portal).

Issue of Part B of Form 16 on or after 1st April 2018

All employers (including Government employers who deposit TDS in the Central Government Account through book entry) shall be able to issue the TDS certificate in Part B of Form 16 (by generation and download through TRACES Portal) in respect of all sums deducted on or after the 1st April, 2018 under the provisions of section 192 of Chapter XVII-B, provided that Form 24Q for fourth quarter is furnished along with duly filled in Annexure II of Form 24Q as substituted vide CBDT Notification No. 36/2019 dated 12.04.2019. To ensure generation of accurate TDS certificate in Part B of Form 16,the employer needs to report correct data in Annexure II of Form 24Q. The TRACES generated Form 16 shall have a unique TDS certificate number.

Authentication of Form 16

The employer, issuing the TDS certificate in Form 16 by downloading it from the TRACES Portal, shall, before issuing to the employee authenticate the correctness of contents mentioned there in and verify the same either by using manual signature or by using digital signature.

Item nos. 2(f) and 10(k) of ‘Part B (Annexure)’ of Form 16:

The item nos. 2(t) and 10(k) in Part B (Annexure) of Form 16, required to be filled-in by the employer manually shall be made available at the bottom of the TRACES generated Form 16 (Part B) and the employer shall duly fill details, where available, in item numbers 2(t) and 10(k) before furnishing of Part B (Annexure) to the employee. The employers who opt to authenticate Part B of Form 16 manually will be provided with the download of the Part B of Form 16 along with these item nos. 2(t) and 10(k)appearing at the bottom of the Form. The employer shall duly fill details, where applicable, in item numbers 2(t) and 10(k) before furnishing of Part B (Annexure) to the employee. The employers who opt to authenticate Part B of Form 16 using Digital Signature Certificate (DSC) will be provided with the download of Part B of Form 16 without item nos. 2(t) and 10(k) and therefore these details shall be required to be prepared by the employer and issued to the employee, where applicable, before furnishing of Part B to the employee.

Time limit for issuance of Form 16

The time limit for issuance of Form 16 by the employer to the employee. Currently, Form 16 should be issued by 15th June of the Financial Year immediately following the financial year in which income was paid and tax deducted.

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