A Comprehensive Guide on Filing ITR-1 Using Form 16

While filing income tax returns is not the simplest process, it is mandatory if your income exceeds a particular threshold. Moreover, filing ITR is also essential if you generate income from specific sources. To make the ITR filing process convenient, the Income Tax Department has released seven different types of forms. 

However, most of the returns are filed under ITR-1 (SAHAJ) and ITR-4 (SUGAM). On the other hand, Form 16 is very crucial for salaried individuals because it details the tax deducted at source (TDS). 

Read on to know more about what Form 16 means and how salaried individuals can file ITR-1 using this form.  

Who is Eligible to File ITR-1?

ITR-1 is a form that needs to be filled by individuals having an annual income of up to ₹50 Lakhs from the following sources:

  • Salary or pension
  • Rent from one residential property (except when the loss is brought forward from the previous financial year)
  • Income from other sources (except lottery and race horses)
  • In case of clubbing of income with a spouse or minor
  • In case of an agricultural income of up to ₹5,000

Note that owning an Aadhaar card is compulsory for filing your income tax returns. In addition, the Income Tax Department has mandated all individuals to link their Aadhaar card to their PAN card on the official website.  

Also, if you are an NRI or RNOR (Resident but Not Ordinary Resident), you will need to file ITR-2, not ITR-1.

What does Form 16 Mean?

Form 16 means that an employer has already deducted TDS from your salary. It is a certificate that is provided by the employer and submitted to the Income Tax Department. As per the Income Tax Act, employers are required to issue this form to their employees when they deduct TDS.

How to Get Form 16 From Your Employer 

According to the income tax rules, it is mandatory for employers to issue Form 16 to their employees. Employees can’t download this form from the Income Tax Department website or any other source. 

If you have lost Form 16, you can ask your employer to issue a duplicate copy. On the other hand, if you want to access Form 16 from previous financial years, you will have to contact your respective employer.

Note that an employee cannot access this form without the employer-generated ID since they are available on the respective employee payroll platform. 

How to File ITR-1 Online Using Form 16

While you will need Form 26AS, receipts, and bank investment certificates, Form 16 is the most important document required at the time of filing ITR-1. 

For instance, you can upload Form 16 to third-party websites that help file your tax returns. This makes the ITR-1 filing process convenient. In addition, you can also follow these steps in order to file ITR-1 online:

  • Log in to the income tax e-filing portal using your credentials
  • Find the ‘Income Tax Return’ category in the ‘e-File’ section and click on it to proceed 
  • Choose the right ITR form number; for instance, salaried individuals need to file either ITR-1 or ITR-2 using Form 16 
  • Select ITR-1, and fill in all the relevant entries with appropriate information
  • Validate all the data entered in the form before you hit the submit button

You will have to fill in the following details from Form 16 when filing ITR-1:

  • Exemptions available under Section 10
  • Deductions under Section 16
  • Taxable Income
  • Section 80C Deductions
  • Tax liabilities

When filing ITR-1, there are a few other things that you must remember. The foremost of them is that you are required to file your returns even if the employer did not deduct any taxes or issue a Form 16.

In addition, if you have switched jobs in a financial year, it is prudent to include income provided by all employers, even if they did not offer you a Form 16. 

Note that non-compliance with income tax rules can lead to legal consequences like the imposition of a penalty or initiation of prosecution proceedings. So, complete your ITR filing before the due date to avoid these consequences.

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