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  • Category: Banking

    What is Form No. 16 and how is it to be filed?


    Do you know what Form 16 is? Are you in doubt as to the requirement of filing the form or regarding the procedure to be followed for filling the same? Please follow this thread to get guided.

    I applied for a Home Loan from the State Bank of India and the same was approved online by the bank a few months ago. But when I went to the nearest bank to submit the approval letter I was told by the manager that I had to submit Form no. 16 for the loan amount to be sanctioned. What is Form no.16 what is the procedure to be followed for submitting the same?
  • Answers

    9 Answers found.
  • There is Form 16 in Income tax and also in GST. Which form 16 you are talking about.
    When we work in an Organisation, if our salary is more than a particular limit, the employer has to deduct income tax at source and he has to deposit the same in the IT account. Then the employer has to give proof that he has deducted the tax and paid to the government on behalf of his employee. This form is known as Form 16. This will be given by the employer to the employee and the same is to be produced to It department when we submit our IT returns. Is the Manager asking this? In many cases, they ask the IT returns for sanctioning the loan.
    The second one is Form GST REG-16. A GST registered person who is having a GST registration wants to cancel his registration. he has to submit an application online to the department giving the asked for details. I don't whether your manager is asking about it. You better get the clarification from the bank and then do accordingly.

    drrao
    always confident

  • Every existing business unit or proposed enterprise is supposed to have a GST number which is essential for buying and selling of all sort of the commodities. Whether one is in the limit of paying GST or not, this formality is required. I think you can consult a business lawyer regarding it.

    Thoughts exchanged is knowledge gained.

  • Form -16 is a kind of certification released from the side of the employer so that the employee gets in prior to 15 th June every year so as to facilitate his employee to file income tax returns within the specified time.
    It containes two components Part A and Part B.
    The Part A would contain the following details-
    1) Employer's name and address
    2) Employer's PAN and TAN
    3) PAN of the concerned employee.
    Part B would include the following parameters-
    1) Taxable Salary of the employee
    2) Details of break up of Salary Components
    3) Salary - deduction under section 80 C and 80 U.
    4) Details of House Property Loan
    5) Relief under section 89.
    The entire part A and B are issued by the Employer to assist the Employee in filling up ITR form in time.
    How to file Income - tax with Form - 16
    We need to have detailed informations with respect to different components such as Taxable - salaries, Income from housing property, Income from other sources etc.
    We may get the details of the following parameters from the Form - 16. Form 16 will include the following components-
    1) Taxable Salary
    2) Allowances exempted from section 10 of the Income Tax Act.
    3) A break up of deductions under section 16 of the Income Tax Act
    4) Income from Housing Property
    5) Income from other sources provided for TDS.
    6) A break up deductions under section 80 including 80C, 80 CCC, 80 CCD, 80D and 80 E.
    7) Aggregate of deductible amount under the chapter 6 A of the Income Tax Act.

  • There are to aspects of your question.
    1. Your direct question 'What is Form 16 and how it is to be filed'.
    2. The logical question why F16 is asked by a bank for purposes of Housing Loan

    1. Form 16:
    If you are a salaried person, employed in some organization, and the employer deducts income tax as TDS from your salary, then the employer has to give the total salary given and the Tax deducted from your salary, with more details, in the form F-16. It is a form prescribed by the Income Tax department. F-16is a certificate of TDS deducted by the salary giver given to the salary receiver.

    It is not to be filed or filled by you(employee), but it is to be obtained by you( employee) from your employer. Even if the TDS is nil you have to get F16 as it will be needed for you to file income tax return details.
    F 16 will show the total salary and financial perks given by the employer and also show the details of the amount of the tax-exempted items in that salary. It also will show the amount of various tax exempted investments you made and declared to the employer.

    2. Now why the bank is asking for F16 from you for purpose of Housing Loan?
    The bank wants to know your loan repayment capacity. The salary certificate you may have submitted might not have carried all the required details to satisfy the bank's requirements. As F-16 is more authentic and accurate, they would have asked for it. From F 16 details the bank would come to know what will be the actual surplus net amount you will have in your hand after the statutory deductions. It will give them an idea and may also confirm from you about the temporary or variable amounts which may not be considered as permanent income. It also will help them to know if you have any other housing-related loan recovery from your salary.

    So the bank will compare the salary slip or salary certificate with F16 and the IT return copy to arrive at the correct repayment ability and to fix EMI and period accordingly.

    So you may approach your employer(salary department) to give you F16 for the last Financial Year, and submit a copy to the bank.

  • There is Form 16 in Income tax and also in GST. Which form 16 you are talking about.
    When we work in an Organisation, if our salary is more than a particular limit, the employer has to deduct income tax at source and he has to deposit the same in the IT account. Then the employer has to give proof that he has deducted the tax and paid to the government on behalf of his employee. This form is known as Form 16. This will be given by the employer to the employee and the same is to be produced to It department when we submit our IT returns. Is the Manager asking this? In many cases, they ask the IT returns for sanctioning the loan.


    The second one is Form GST REG-16. A GST registered person who is having a GST registration wants to cancel his registration. he has to submit an application online to the department giving the asked for details. I don't whether your manager is asking about it. You better get the clarification from the bank and then do accordingly.

    drrao
    always confident

  • Form 16 is provided by employers to all salaried individuals. This contains all the information required while filing the ITR. So, Form16 is a kind of certificate that you receive from the company where you work. Employers may issue this certificate every year in the month of June.

    There are two components of Form 16 :
    Form 16 - Part A:
    The main components of part A are company/employer name and address, Employer's PAN and TAN, Employee's PAN, and the details of tax deducted or deposited on a quarterly basis.
    Form 16 - Part B:
    Part B generally have other components like - Salary breakups, Breakup of exempted allowance, Deductions allowed, any relief under section 89, and other deductions under section 80C, 80CCC, 80CCD, 80D, 80G, 80E, and 80TTA.

  • Banks generally approve loans against some securities like your fixed deposits or immovable property mortgage and things like that so that they would be in an advantageous condition while recovering the loan from the person in case he makes delay in repayment. Now the primary question which comes in this matter is that are you employed or not? If you are employed then your employer would deduct income tax from your salary or if the salary is below the limit it would not deduct but issue you a certificate in form-16 which is a type of information for you as well as the tax department that this person is liable to tax or not liable to tax and so much tax has already been deducted from his salary and if he has some additional income he would fill the income tax return and deposit the residual tax if any at that time which is known as self assessment tax. This is the procedure adopted by the Income Tax department and it is the duty of the employer to mandatory cut the TDS if applicable from the salary of the employee every month and this part of tax is known as advance tax. The total tax payable then becomes the sum of advance tax and self assessment tax and the latter is generally paid by the person after 31st March of the year. Generally Income Tax return is to be submitted by July end and to that matter one can do these adjustments.

    The form-16 issued by the employer contains the salary and other perquisites and allowances etc given to the employee and the income tax department takes it as an authentic document. Banks would also honour this document from another angle as they would know the income of the person from the organisation he is working. This knowledge satisfies the bank that the person would be able to repay the loan. If his salary is very less the bank would reduce the loan amount and increase it only when additional securities like property or fixed deposits are given to the Bank in shape of mortgage for custody till return of the loan is made.

    If you are not employed then tell them that form-16 is not applicable in your case and then you will have to bring some other securities or property papers for the needful before they can release the loan to you.

    Knowledge is power.

  • Form 16 is a form of income proof which is provided to employees from its employer. Form 16 is only provided to employees or individuals who are in service (Government and Private) from its employers for the income earned from them for the whole year.

    Let's elaborate it a little for clarity. An employee works for the employer and in consideration receives salary every month. Now, if the salary is above the thresh hold limit i.e. taxable, then TDS is deducted on the same and deposited every month on behalf of the employee by the employer. The employer files a quarterly return for the same and after filing return for all 4 quarters, he issues Form 16 to the each employee whose tax is deducted and deposited.

    This Form 16 will contain the following details:
    1. Basic details of employer and employee viz. PAN, TAN, Address
    2. Salary earned by employee
    3. Deductions allowed to employee
    4. Tax deducted and deposited summary

    Form 16 contains 2 parts i.e. Part A and Part B.
    Part is always downloaded from TRACES website of the Income Tax and Part B is provided by employee containing salary details as explained above. But as per the recent changes even Part B will be available online on TRACES website and will have to be downloaded from there itself.

    Now in your case as the State Bank of India (SBI) is asking for Form 16, it means it wants to confirm the income source of yours and at the same time verify your capacity to pay off the loan at the same time.

    In case you do not have a salary income as your primary source of income then the bank may ask for ITR or Income Tax Returns for last 3 years to confirm your earning capacity and ability to payoff the EMI's for the home loan.

    Live before you leave.

  • The income tax deducted by an employer and deposited with the authorities regularly. The employer issues Form 16 to employees as form 16 is a valid document containing the information regarding the TDS deducted and deposited on the behalf of the employee.

    Form 16 contains the two parts i.e. Part A and Part B

    Part A contains:
    Name and address of employer, TAN, and PAN of the employer, PAN of the employee, Summary of tax deducted and deposited quarterly, which is certified by the employer.

    Part B contains:
    Details of salary i.e. breakup of salary, deductions, allowances exempted, taxable salary, breakups under various sections. Tax payable or refund etc.


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