Are you digitally signing Form 16’s the Right Way? These 10 tips will help you

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Are you Digitally Signing
Akash VM


With only a few more weeks to go for May 2015, the busy times are back with employers’ preparing to provide their employees with Form-16’s for the Financial Year 2014-2015. We all know that Form-16 is the TDS deduction certificate required to be issued to all TDS positive employees on or before 30th May of every year. Last year the government introduced Part-A to be downloaded from “TRACES” and Part-B to be generated from the respective payroll software. We assist in digital signing & distribution of about 11 Lakh+ Form-16’s & are happy to share our expertise with you all…

  • Decide whether you are going to provide Form-16’s to all employees [ TDS positive cases & Nil TDS employees ] or to only TDS positive employees. This will impact your Q-ETDS compliance requirements.
  • Verify your Part-A data with Part-B data. The “Total Tax Liability” data on Part-B should be equal to or less than the “TDS Deducted & Paid” data on Part-A being generated from TRACES for each employee.
  • Check who’s name, designation & signature will be appearing on the Form-16. Ideally you want the Form-16 Part-A & Part-B to contain the same name & designation.
  • Check the date on Part-A & date on Part-B… You don’t want two different dates !
  • Ensure the digital signature is of CLASS-2 [ as required by the income tax department for use on form-16’s ] and has a validity of atleast 3 more months.
  • Decide if you would send Part-A & Part-B as separate attachments or merge & provide as a single attachment. The latter is convenient in the employee’s point of view.
  • *Important* – Check if your payroll software support’s USB Digital Signature. PFX files are no longer to be used, as per government regulations.
  • Planning to password protect your Form-16’s for enhanced security ? Decide the password parameter that you would use. Ensure the password is 128Bit SHA Compliant.
  • The date on Part-A, Part-B & the Digital signature should be on or before 30th May 2015
  • If you are emailing the Form-16’s to your employees, automate the emailing process. It’s not a very good idea to do manually or using macros – these may affect the accuracy of the exercise.
  • If you are uploading the Form-16’s on your ESS Portal, ensure the File name is as required by your ESS software – Employee Id ?
  • Last but not the least, sample test before you issue Form-16’s. The last thing anyone wants is the exercise to be less than 100% accurate!

Ok… so here’s something interesting. If you are looking for a tool to merge Form-16 Part-A & B, password protect, digitally sign or bulk email it to your employees in a single shot…. Download this tool. Click Here.

It’s free, though ! See if it helps you.

Do post your questions / comments below. Happy to help.

Article Categories:
Digital Form-16 · Payroll · Tax Compliances · TDS