Form 16 is a certificate issued by employer for the TDS deducted by employer on the salary of the employee. The employer has to issue the Form 16 once in a year on before 31st May of the next year immediately following the financial year in which the TDS is deducted. Form 16 is a very important tool for filing income tax return for salaried individuals.
Sometimes it is possible that employer is not able to issue Form 16 on time. Salaried people think it difficult to file income tax return without Form 16, but ITR can be filed without Form 16. Following steps need to be followed to file ITR without Form 16:
Step 1: Computing Gross salary
As the employee is not provided with the Form 16, he himself has to calculate gross salary received. Employee has to gather all the monthly salary slips and extract the gross salary and other allowances. In case employee is also not available with the salary slips, he can extract the gross salary received from the bank statement i.e. add the amount of salary received in every month of the relevant financial. The amount of gross salary should be inclusive of all allowance received provided by employer, from which some may be exempt.
Step 2: Calculate exemptions allowed as per Income Tax act
The income tax act allows employee to deduct some allowances as exempted income as calculated according to income tax rules from salary to derive the net taxable salary income. There are many exemptions allowed on allowances. Calculate the total exemptions allowed. The exemption so calculated should be reduced from the gross salary income.
Step 3: Deduct the professional tax paid
Reduce the amount of professional tax paid, it is generally paid by employer. Employee may get this details from the salary slip. This need to be reduced to get to taxable salary.
Step 4: Compute Income from house property
House property is needed to be calculated where the person is having the rental income from house property or in case the person is owning a house property on which the house loan is taken and the interest is payable on same. It also needs to be disclosed in the ITR. Some deductions are allowed on house property income that are:
1. Municipal Tax paid- On the actual payment basis
2. Standard deduction of 30% of the house property income- This is only in case of rental income.
3. Interest- For self-occupied property max up to Rs.2,00,000 is deductible.
(Note: Don’t forget that Rs.1,50,000 is cumulative deduction allowed under section 80C for many deductions available under this section such as tuition fees, PPF, NSCs, five-year deposit scheme of post office.)
5. Stamp duty and Registration fees paid while purchasing a house is also allowed as deduction u/s 80C max up to Rs.1,50,000.
The net figure after all these deductions will the income from house property.
Step 5: Calculate capital gains
Capital gain income is needed to be calculated where the person has sold the capital asset. If one has sold some asset, he has to calculate as well as declare capital gain income in the year the asset is sold. Capital gain can be any on asset like shares, mutual funds and other assets. Check here the capital gain on sale of shares and mutual funds.
Step 6: Calculate income from other sources
Income which is not covered by any of the above head needs to be disclosed under head income from other sources. The most common incomes are interest income, gifts or winnings. These all incomes need to be disclosed in ITR under this head. The amount of interest on saving bank account is also required to be disclosed but don’t forget that u/s 80TTA interest on saving bank account is exempt up to Rs.10,000. Also, this deduction is only allowed for saving account not for fixed deposits.
Step 7: Claim your all deductions available
After the disclosure of all the incomes, add up all of them. Then claim tax benefits i.e. various deductionsallowed under income tax act such as tuition fee,LIC, mediclaim, investment in post office saving scheme, NPS, pension funds, PPF, donations, repayment of housing loan, interest on education loan, medical expenses incurred etc. But you need to have documentary proofs of all of the deductions. Deduction of HRA paid can also be claimed u/s 80GG but you need to submit rent receipts to employer.
Step:8 Claim tax already paid (TDS)
After entering all the details of incomes and deductions you need to claim TDS other than on salary (TDS on salary is filled at the time of entering salary details) and advance tax paid. You can also get this details from Form 26AS. Form 26AS can be viewed on income tax department’s website. In this form, you can get details of the exact amount of TDS against your PAN. In case there is any discrepancy in amount actually deducted and amount which should be deducted, employee has to contact his employer and resolve the issue.
Step 9: Pay the additional/ necessary tax which is due
After all the above steps, check the amount of tax payable in your computation. If there is any amount payable, then you have to pay the balance tax.
Step 10: E-file your tax return
In last, file your return on department’s website https://incometaxindiaefiling.gov.in/ and download the acknowledgement. You can either e-verify the tax return or send it physically to CPC, Bangalore. To know more about e-verification click here.
About the Author
Arpit Goyal is pursuing CA and B.com & also working as an article assistant in Gurgaon. He has an immense interest in Taxation. He loves to use technology to spread knowledge about taxation & accounts.