Are you confused about understanding Form 16 and Form 26AS? Don’t worry, we here at TDS Returns are here to help! In this article, we will discuss what these two forms are and how to use them for tax filing.
Form 16 & Form 26AS: What They Are & What They Do
Form 16 and Form 26AS are both important documents that anyone making Tax Deducted at Source (TDS) returns needs to submit. Have a closer look so you can understand them better.
Form 16 is an essential document you need when filing your income tax return. It serves as proof of any tax deductions made from your monthly salary during the year it was issued in. The employer issues the form after computing and deducting the tax from each month’s wages or salary payments as per applicable laws, like in the case of Services Taxes, Professional Taxes, etc. You may also be provided with a printed version that includes all the necessary details such as the name of the employee, PAN number, and TDS amount deducted by the company/organization. Form 16 is exempt from Income Tax deductions if the employer has already deposited the taxes that correspond to each payment made towards an employee’s salary with the Indian government through a challan (tax payment form).
For those who work in establishments where there’s no requirement for an Employer-Employee relationship, such as working with institutions governed under Section 44AD of the Income Tax Act, 1961 (Applicable mostly for Small Businesses), Filing IT returns may requires presenting Proof of Paid taxes either via Soft Copy or Hard Copy called ‘Challan’. This document is known as Form 26AS. It displays details like the Payment Date and Challan Number on it along with other details required for claiming exemption under Section 44AD of ITA 1961. With this information, your returns can be filed accurately without needing another individual’s Details (like Employers’) Shared Documents (like Salary Slips) Published Information regarding Exemptions allowed Under Section 44AD of ITA 1961, etc.
You must obtain a valid copy of both forms – 24Q and 26AS – before submitting them mutually along with your return file for incomes earned under any category throughout FY 2020-2021 – Be it Salaries/Pensions paid by State/Central Govt or Business Ownership based Profits generated by proprietorship concerns or GIG Based Payments or Business Deduction Deductions eligible amounts provided legally i.e., Interest earning on Savings Bank Accounts, etc credited towards PAN Holder bank accounts directly from Banks providing applicable Banking services respectively. Missing out on accuracy here could become problematic later because discrepancies will surface then causing costly penalties too – The accuracy level must be kept at 100%.
Income Tax Return filing due dates usually fall around end ofJuly onwards but change depending upon certain Government notifications every year; So keeping an eye on changes related to IT Departments’ websites linking up Forwards & Backwards related communication roles every now & again – Would turn out very beneficial eventually.
Finally, just make sure that both Forms are filled correctly including verifying the total Annual taxable income and Final TDS deductions amounts on them (which get further attached\appended online).