Form 16 is a crucial document for salaried individuals in India when it comes to filing their Income Tax Returns (ITR). Issued by employers, it provides a summary of the income earned and the tax deducted at source (TDS). While Form 16 simplifies the ITR filing process, it's not always sufficient on its own. It's essential to understand what Form 16 doesn't tell you to ensure accurate and complete tax filing for the assessment year 2025-26.

Form 16 is a certificate provided by employers to their employees, detailing the salary paid and the tax deducted at source (TDS) during a financial year. It is issued under Section 203 of the Income Tax Act, 1961. The form acts as proof that the employer has deducted tax from the employee's salary and deposited it with the Income Tax Department. It consists of two parts: Part A and Part B. Part A contains details of the employer and employee, including PAN and TAN details, and a summary of TDS deducted. Part B provides a detailed break-up of the salary earned, other income, deductions, and taxable income.

While Form 16 provides a comprehensive overview of your salary and TDS, it doesn't cover all aspects of your income and potential deductions. Here's what Form 16 doesn't tell you:

• Income from Other Sources: Form 16 primarily focuses on income from salary. It doesn't include income from other sources such as interest from savings accounts or fixed deposits, capital gains from investments, rental income from property, or any other income. You need to independently track and report these incomes in your ITR.
• Deductions Not Declared to Employer: Form 16 only reflects the deductions that you have declared to your employer during the financial year. If you missed declaring certain deductions, such as investments made under Section 80C after submitting your investment declaration or medical insurance premiums paid under Section 80D, these won't be reflected in your Form 16. You need to claim these deductions separately while filing your ITR, based on your investment proofs and payment receipts.
• Details of Exempt Allowances: While Form 16 mentions the allowances you receive, it may not provide a detailed break-up of the exempt portion of those allowances. For instance, House Rent Allowance (HRA) has a specific exemption calculation based on salary, rent paid, and location. You need to calculate the exact exempt amount based on the rules and claim it in your ITR.
• Capital Gains Details: If you have sold any investments like stocks, mutual funds, or property during the financial year, the resulting capital gains or losses are not reflected in Form 16. You need to calculate capital gains based on your purchase and sale records and report them separately in the ITR using relevant schedules.
• Information on Other TDS: Form 16 is specific to TDS deducted on your salary. If you have other income sources where TDS has been deducted, such as interest income from fixed deposits (Form 16A) or rent income (Form 16C), these details won't be available in Form 16. You need to collect these TDS certificates and reconcile the amounts while filing your ITR.
• Tax Regime Selection: Form 16 does not dictate which tax regime (old vs. new) you should opt for. It's your responsibility to evaluate both regimes based on your income, deductions, and investments to determine which one is more beneficial for you.

To ensure accurate ITR filing, supplement your Form 16 with the following documents and information:

• Form 26AS and Annual Information Statement (AIS): These are comprehensive statements available on the Income Tax Department's portal that provide details of all TDS, taxes paid, and income reported against your PAN. Reconcile the details in Form 16 with Form 26AS and AIS to ensure accuracy.
• Salary Slips: Use your monthly salary slips to verify the components of your salary and allowances mentioned in Form 16.
• Bank Statements: Collect bank statements to track interest income, dividend income, and any other income credited to your account.
• Investment Proofs: Keep investment proofs such as LIC premium receipts, PPF statements, NSC certificates, and ELSS investment statements to claim deductions under Section 80C.
• Rent Receipts: If you are claiming HRA, keep rent receipts and a copy of the rental agreement handy.
• Home Loan Statement: If you have a home loan, obtain a statement from your lender showing the principal and interest paid during the year to claim deductions under Section 80C and Section 24.
• Medical Insurance Premium Receipts: Keep receipts for medical insurance premiums paid to claim deductions under Section 80D.
• Capital Gains Statements: Obtain capital gains statements from your broker or financial institution to report capital gains accurately.

While Form 16 is a valuable document for salaried individuals, it is not a complete picture of your income and tax obligations. To file your ITR accurately, gather all relevant documents, reconcile the information, and ensure you report all income and claim all eligible deductions. Failing to do so may lead to errors, notices from the Income Tax Department, or even penalties. By taking a comprehensive approach to tax filing, you can ensure compliance and optimize your tax savings.