Even if you don’t have Form 16, there are several documents you can use as reference to file your return.
For the salaried, Form 16 is a basic document used for filing their income taxreturns (ITR). Filing one’s ITR without Form 16 seems almost impossible for most salaried individuals.
However, there could be times when you do not get Form 16 for the year. It could be because your employer is closing his business or maybe you have changed jobs during the year without completing proper exit formalities. Now, even if you don’t have Form 16, there are several documents you can use as reference to file your return.
Here’s a step-wise guide on how salaried people who don’t have Form 16 can file their ITR:
Step 1: Compute Income from Salary
For computation of salary income, your salary slips will be the main source of information. So, do remember to collect your monthly pay-slips from all the employers you have worked with during the year. This year also, you will be required to provide the complete break-up of your salary income.
These details are: Gross salary (Salary as per Section 17(1), Value of Perquisites, Amount of profit in lieu of Salary), Allowances exempt under Section 10, Deductions under section 16, i.e., standard deduction, Entertainment allowance (for government employees only), and Professional tax.
Your salary slips should normally provide these figures. However, many companies don’t provide the amount of ‘value of perquisites’ and amount of ‘profit in lieu of salary’ in salary slips. You can ask your HR or finance department to provide Form12BA. The form contains the details of the value of perquisites and amount of profit in lieu of salary paid to you by your employer.
Apart from the information mentioned above, your salary slips reflect the value of all the allowances paid to you, the amount deducted towards provident fund (PF), tax deducted at source (TDS), and so on.
Do make use of allowances which help you reduce your tax liability like HRA, LTA etc. However, while computing allowances, be careful as some allowances are partially exempt and some are fully.
The amounts of allowances that are tax-exempted are required to be mentioned in ITR. Also, don’t forget to claim the standard deduction of Rs 40,000 under section 16 (ia) for this year.
Step 2: Match the TDS deducted with your Form 26AS
Form 26AS should contain the details of TDS deducted not only on your salary income but also on other incomes. It is important to cross check your TDS with the figures shown in your Form 26AS as there could be some discrepancies.
If discrepancies exist, then you need to contact the particular deductor. So, do match the TDS amounts shown in your Form 26AS with the respective sources like TDS on salary with the salary slip, TDS on fixed deposits (FDs) with the TDS/interest certificate etc.
Step 3: Compute Income from house property
If you are receiving any rental income from letting out the house property owned by you, then you need to report it under this head. Further, if you have availed any housing loan either on the let out property or on self-occupied property and are paying interest on the loan, then you will get deduction of the same under this head.
Additionally, if you own two or more houses, then you need to check the deemed let-out concept first. If you are one who is earning rental income, then you can avail a flat deduction of 30 percent and deduction of municipal tax paid (if any) from your rental income.
Step 4: Compute Income from capital gains
In case of gain from the sale of equities, equity-oriented mutual funds you need to obtain a summary statement from your broker and you will be glad to know that in such cases the gain shall be exempt up to Rs. 1 lakh if it is held for more than 1 year and was sold in FY 2018-19. In case of gain from the sale of land or building, you need to have the purchase and sale deed handy from where you can take accurate values for calculation.
Remember you cannot file your tax return using ITR-1 if:
A) You have sold equity shares and/or equity mutual funds in FY 2018-19;
B) If you are holding investments in unlisted shares;
C) If you own more than one house property.
In such cases you are mandatorily required to file ITR-2 or ITR-3, as applicable.
Step 5: Compute Income from other sources
Income from other sources includes interest on various bank deposits (savings, recurring deposits, FDs, or any other term deposit), interest on income tax refund, and so on. You can refer to your bank passbook to know about the interest income and Form 26AS for interest on income tax refund.
Remember, this year you are required to mention the source of your interest income as well from the drop down menu available in the ITR form.
Step 6 : Claim all available deductions
The various sections of the Income-tax Act under which an individual can claim deductions are section 80C (life insurance, PF, equity-linked savings schemes, Public Provident Fund, principal repayment of home loan and so on), 80D (medical insurance premium) and so on.
Every deduction has a specified limit up to which you can avail it. For instance, section 80C can be claimed up to Rs 1.5 lakh. So, add up all the available deductions in your case along with their relevant proofs.
Step 7: Compute total taxable income
You are about to reach the final stage. The deductions shall be subtracted from the total of income from various sources and the final figure will be your total taxable income.
Step 8: Calculate your income tax liability
Determine your income tax liability on the total taxable income. Click here to use our income tax calculator.
Step 9: Pay additional tax (if required)
If your total tax liability is more than the amount of tax paid as per your Form 26AS, then you have to pay the excess amount to the tax department.
Step 10: File your ITR
You are good to go to e-file your income tax return without Form 16. Just don’t forget to e-verify the same within 120 days of filing.
What you should do
Even if you do not have your Form 16 for the year, you just need the documents mentioned above to file your ITR. Follow the above explained process and you are ready to go. Further, remember to file your ITR within the due date or be ready to pay late filing fees under section 234F for income tax returns.
(The author is Co-founder, Tax2win.in)