Form 16 is the certificate for Tax Deducted at Source for salaried employees. Anyone whose income is above 2.5 lakhs per annum will now have to file their returns. There are a number of situations where it becomes mandatory to file income tax returns in India. Do you know? how to file income tax returns with Form 16 here are some of them which will throw light on.
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- The gross total income, before allowing the deductions under 80C to 80U exceeds Rs 2.5 lakhs in a financial year. The limit is Rs 3 lakhs for senior citizens, for those who are above 60 years of age but less than 80 years of age and Rs 5 lakhs for super senior citizens who are more than 80 years old.
- In case one is with a company or a firm irrespective of the fact that there is income or loss in the current financial year.
- In case one wants income tax refund
- In case one wants to carry forward a loss under the head of income
- Filing the returns also becomes mandatory if one is a resident individual and have an asset or financial interest in an entity located outside India
- In case one is a Resident and is a signing authority in a foreign account.
- One is also required to file their IT return when they are in receipt of income derived from the property held under trust for charitable or religious purposes or educational or medical institution.
- While applying for loan or Visa, proof of return could be needed as well.
- In all the above-mentioned cases, TDS Form 16 are required.
There are also some other factors regarding exemptions with regards to Form 16 income tax eligibility that come into play here. However, exemptions are allowed only when certain criteria are fulfilled.
- The employee has earned only salary income and income from savings bank account and the annual interest earned from the savings bank account is less than Rs 10,000.
- The total income of the employees does not exceed Rs 5 lakhs and by total income it means, gross total income less deductions under Chapter VIA.
- The employee has submitted his or her PAN to the employer.
- In case the employee has also reported his income from interest on savings bank account to the employer.
- In case the employee has received Form 16 from the employer.
- The total tax liability of the employee has also been paid off by the employer by way of TDS and the employer has also deposited TDS with the Central Government.
- In case of the employee having no refund claim
- In case the employee receives salary only from one employer
- In case the employee has not received any notice from IT Department for filing IT return.
Overall it can be said, that Form 16 income tax eligibility is subject to one’s income and how one is managing their finances. There are many who do not earn about Rs 2.5 lakhs and they have no use for Form 16 and they have never filed their returns as well. However, it is a good habit to maintain one’s Form 16 because IT returns of three consecutive years would be needed for any major financial decision like applying for a loan.
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