The month of May can strike a chord with all of us in one way or the other. For students, it is summer vacations. For cricket fans, it is Indian Premier League. For travel freaks, it is time to switch on beat the heat mode. For HR and Finance Teams? It is definitely issuance of Form 16. Doing it right and on time is an unwritten rule for all organisations. Follow compliance without a miss and nail down updations, if any.
Every year, teams assigned with distribution of Form 16’s clock in precious time and abundant effort. Nevertheless, there can still be errors overlooked, dilemmas, recent additions to Form 16 that missed your attention etc. Form 16 has to be free from flaws, what about yours?
As we are aware, Part A of Form 16 states all tax deductions of each employee. It has to be foolproof by all means, as taxes and employees equation is a tough one. Leave no loopholes with these checkpoints, suggested by experts who manage Form 16’s hassle-free.
#1 – Data Points Validation
|Parameter||Reporting Requirement||Consequence of Inaction|
|1||Employer TAN||Correct TAN to be quoted while filing QETDS Returns||Invalid Returns and Penalty for delayed Filing|
|2||Employer Data||Correct Address & Authorised Signatory who will sign the Form-16, to be provided||Incorrect details on Form-16 – Part A|
|3||Employee PAN||Accuracy of Employee PAN to be maintained.||Tax Credit Issue|
|Consistency of Employee PAN across Q1, Q2, Q3 and Q4 Data||TDS Mismatch between Real & Expected|
|4||Challan Data||This has to be validated, CIN generated and included in the ETDS Filing.||Any incorrect challan or challan serial number/date/bsr code will render all the line items mapped to such challan invalid, thereby not appearing on Form-16 Part A|
|5||Challan Amount||Challan amount should be either greater than (or) equal to the line items mapped||Line items not appearing on Form-16 Part A|
|6||Employee Data||Form 16 Part A will be generated only for such employees who have Annexure II. Hence even if an employee appears in any 1 of QETDS filing, they should be included in Annexure II||Form 16 Part A will not be generated|
#2 – Groundwork For Q4 Filing
Annexure I :
- Reassure whether all TDS challan details mentioned during filing are correct. Review whether the challan amount is greater than or equal to the deducted TDS.
- Check whether the amount paid and deducted TDS is aligned with payroll data
- Don’t miss to include all File Not Found entries during filing
Annexure II :
- All employees included in Annexure I(Q1 to Q4) have to be added here.
- The Gross Salary and TDS credit columns in Annexure I and II have to be in sync with one another
- Mention Previous Employment Income and TDS, if any, separately in Annexure II. Also there should be no tax liability under this
- For Nil TDS employees, if you are issuing Form 16 Part A, remember to add them in both the Annexures
#3 – The Match-Game/Watch If They Match
- Just a step away to issuing Form 16, check if : i) Part A total TDS amount paid matches with Part B ‘Gross salary under Section 17’
- ii) Part A TDS matches with Form 12BA TDS deducted amount or Annexure II TDS paid amount
#4 – Generation Of Form 16
- All Company and Signatory Details like Company Name, Address, Authorised Signatory Name, Designation have to be examined accurately
- Check if the date of signing Form 16 is prior to the date of issuance.
- Make sure if the amount paid and tax credit mentioned in Form 16 is in accordance with the payroll statement
- Next, decide on the number of pages that you would be digitally signing Form 16. Finalise the position of signature and apply the same using any software like e-SmartSign.
Relativity’s footprints are left in almost 4 lakh compliant Form 16’s every year. With our expertise in Q-ETDS compliance, Taxation and all financial year end activities, you will always be compliant, worry-free with minimal work load !