Form 16
What Form 16 means, where you will meet it and what it means for your business.
DefinitionForm 16 is the TDS certificate an employer issues to each employee by 15 June, showing the salary paid, deductions claimed and the tax deducted and deposited during the financial year.
Form 16 has two parts. Part A comes from the TRACES portal and shows the employer's TAN, the employee's PAN and the quarterly TDS deposited. Part B is the employer's breakup of salary, allowances, exemptions such as HRA, deductions under Chapter VI-A if the old regime was chosen, and the resulting tax. You meet it every June as an employee, and as an employer you must issue it after filing the fourth-quarter 24Q return. What it means for you: it is the primary document for filing an ITR, and its figures should match Form 26AS and the AIS. As a founder drawing salary from your own company, you need to run TDS on it and issue yourself a Form 16, which banks ask for in loan applications. Missing or late certificates attract a penalty per day.