One of our employees is going to resign within a couple of days (most probably by July 10, 2010). He wants a certificate in Form No. 16 in respect of salary drawn during the financial year 2010-11 (i.e., from April 1, 2010 to July 10, 2010). This certificate he wants to submit to the new employer. My queries are –
1. What is the legal position pertaining to date of issue of Form No. 16 in such cases? Can the outgoing employee legally compel us to issue Form No. 16 at the time of resignation on July 10, 2010?
2. Can we issue Form No. 16 in the old format?
3. If old format is not permitted can we give information only in Part A and Annexure B? Can we ask outgoing employee to take the information in Part B from the new employer?
In respect of salary paid on or after April 1, 2010, certificate shall be issued in new Form No. 16. This form is divided in different parts (e.g., Part A, Part B, verification, Annexure A and Annexure B).
* Part A contains information of employer and employee (like name and address of employer, PAN/TAN of deductor, name and designation of employee, PAN of employee). Besides, one has to disclose in Part A, assessment year, period of employment, address of CIT (TDS) and summary of tax deduction at source (like quarter wise information of receipt numbers of original quarterly TDS returns in Form No. 24Q, amount of tax deducted and amount of tax deposited or remitted).
* In Part B, the employer/deductor will have to disclose the details of salary paid, other incomes, amount deductible under Chapter VI-A, tax payable and relief under section 89.
If an assessee is employed under more than one employer during the financial year, then how to generate new Form No. 16 is narrated by Note 1 appended at the end of the form which states as follows –
“If an assessee is employed under more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers. Part B may be issued by each of the employers or the last employer at the option of the assessee.”
Points raised in your query can be discussed as follows –
1. For the service rendered during April 1, 2010 in July 10, 2010, salary certificate in new Form No. 16 can be issued on or before May 31, 2011. The outgoing employee cannot compel to get Form No. 16 at the time of resignation on July 10, 2010.
2. In respect of tax deducted on or after April 1, 2010, salary certificate cannot be issued in the old format of Form No. 16.
3. The old employer will give Form No. 16 in the new format. The information will be given in different parts of the form (i.e., Part A, Part B, Verification and Annexure B). If, however, the outgoing employee is interested, he can get the information in Part B on consolidated basis for the whole year. For this purpose, he will have to request the old employer and the new employer. On such request, the old employer will issue Form No. 16 without showing anything in Part B. The new employer will issue Form No. 16 and it will include consolidated data of salary of the entire year in Part B. In such a case, the old employer should give details of gross salary, allowances, deduction, etc., separately on a plain paper so that it can be given to the new employer for the purpose of calculating tax liability under section 192 and preparation of Form No. 16 (Part B).
1. What is the legal position pertaining to date of issue of Form No. 16 in such cases? Can the outgoing employee legally compel us to issue Form No. 16 at the time of resignation on July 10, 2010?
2. Can we issue Form No. 16 in the old format?
3. If old format is not permitted can we give information only in Part A and Annexure B? Can we ask outgoing employee to take the information in Part B from the new employer?
In respect of salary paid on or after April 1, 2010, certificate shall be issued in new Form No. 16. This form is divided in different parts (e.g., Part A, Part B, verification, Annexure A and Annexure B).
* Part A contains information of employer and employee (like name and address of employer, PAN/TAN of deductor, name and designation of employee, PAN of employee). Besides, one has to disclose in Part A, assessment year, period of employment, address of CIT (TDS) and summary of tax deduction at source (like quarter wise information of receipt numbers of original quarterly TDS returns in Form No. 24Q, amount of tax deducted and amount of tax deposited or remitted).
* In Part B, the employer/deductor will have to disclose the details of salary paid, other incomes, amount deductible under Chapter VI-A, tax payable and relief under section 89.
If an assessee is employed under more than one employer during the financial year, then how to generate new Form No. 16 is narrated by Note 1 appended at the end of the form which states as follows –
“If an assessee is employed under more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers. Part B may be issued by each of the employers or the last employer at the option of the assessee.”
Points raised in your query can be discussed as follows –
1. For the service rendered during April 1, 2010 in July 10, 2010, salary certificate in new Form No. 16 can be issued on or before May 31, 2011. The outgoing employee cannot compel to get Form No. 16 at the time of resignation on July 10, 2010.
2. In respect of tax deducted on or after April 1, 2010, salary certificate cannot be issued in the old format of Form No. 16.
3. The old employer will give Form No. 16 in the new format. The information will be given in different parts of the form (i.e., Part A, Part B, Verification and Annexure B). If, however, the outgoing employee is interested, he can get the information in Part B on consolidated basis for the whole year. For this purpose, he will have to request the old employer and the new employer. On such request, the old employer will issue Form No. 16 without showing anything in Part B. The new employer will issue Form No. 16 and it will include consolidated data of salary of the entire year in Part B. In such a case, the old employer should give details of gross salary, allowances, deduction, etc., separately on a plain paper so that it can be given to the new employer for the purpose of calculating tax liability under section 192 and preparation of Form No. 16 (Part B).
