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What is Form 16?

Form 16 is the TDS certificate that an employer issues to you, when they deduct TDS from you. When an employer deducts TDS from employees' salaries, the Income-tax Act requires a certificate to be issued by the employer, where the details of the tax deducted and deposited are certified.

What is Part A and Part B of Form 16?

An employer who deducts tax on an employee's salary, shall file Form 24Q. It is a quarterly return that represents the salary paid to an employee and the tax deducted or remitted for each employee, per quarter. Annexure I of Form 24Q presents the deductee wise (employee wise) details of the salary paid and the tax deducted for each employee.

Once Form 24Q is filed by the employer, the tax department updates Form 26AS of an employee with the salary and the tax details presented in Annexure I of Form 24Q. Subsequent to this, employer can download Part A of Form 16 from TRACES, which is the salary amount paid or credited and the amount of tax deducted based on the Annexure I of 24Q filed.

Part B is the details of the salary paid and any other income or tax deducted. The Form 24Q of the last quarter of the financial year shall contain data of Annexure II as well. This includes total salary paid, tax exemptions or deductions claimed and the TDS for the year.

The Income Tax department uses Annexure II data for verifying the annual tax liability on salary paid to an employee, performs fit-gap analysis with salary, tax exemption and tax deducted at source.
This result is in Part B of Form 16.

How to generate Part A?  

Employer can download Part A of Form 16 from the TRACES website, based on Annexure I of Form 24Q filed. Please refer to http://contents.tdscpc.gov.in/en/download-form16a-etutorial.html# for step by step process to download Part A .

How to generate Part B?

If you have not opted to merge Part A and Part B, use the generate facility under Part B, in the Form 16 landing page of greytHR. If you have selected merging of A and B, Part B can be generated in continuation of Part A upload.

How do I merge Part A and Part B?

It is pretty simple when you use greytHR. Follow the below steps:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.

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    You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 
  3. Under the Form 16 Generation section, select the check box adjacent to Merge Part A and Part B. 
  4. Click Save. A message appears prompting you that the Form 16 Option is saved successfully.

Can I generate Form 16 with previous employment details?

Yes, you can generate Form 16 with previous  employment details. Perform the below steps to generate the form:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.
     

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    You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 


  3. Under the Part B Configuration section, select the check box adjacent to Show with Previous Employment.
  4. Click Save. A message appears prompting you that the Form 16 Option is saved successfully.

How to generate Form 16 without previous employment details?

To generate Form 16 without the previous employment details, perform the following steps:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.

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    You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 

     

  3. Under the Part B Configuration section, clear the selection for the check box adjacent to Show with Previous Employment.
  4. Click Save. A message appears prompting you that the Form 16 Option is saved successfully.

How do I get the digital signature on Form 16?

To get the digital signature on Form 16, perform the following steps:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Under the Part A section, click
  3. Follow the wizard to generate Form 16.
  4. In the SIGN section (of Part A or Part B), click the link to download the greytHR Digital Signer.

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    Download the greytHR Digital Signer if you are signing the Part B files for the first time in greytHR. To install, navigate to the folder where the installer is downloaded and double-click the executable to start the installation. Follow the on screen instructions to install the utility.


  5. To open the utility, double-click GreytHR Form16 Digital Signer.exe on your desktop.
  6. In the login window, enter your credentials.

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    The domain name is your greytHR account URL.The user name and password are the same that you use to sign in to the application. If the connection does not establish then click  to enter your proxy settings.
  7. Insert the eToken as per the onscreen prompt.

  8. In the utility, select the signatory's name from the drop-down list.

  9. Click  The Refresh icon of the Digital Signer displays. to refresh and select the signatory's name from the drop-down list.

  10. Click The Reload Batches button. to refresh the utility with the latest Part B uploaded. The utility automatically uploads and signs the files and downloads them back to greytHR.

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    • The process takes only a few seconds. Initially, the icon of each stage appears. For example, for file download and for signing.
    • The tickmark icon displays to indciate success of a stage. indicates the success of a stage. In case of failure, the icon appears as .
  11. In the Sign section, click Next. The downloaded batches are automatically signed and uploaded back to greytHR. The progress in the utility displays on the greytHR wizard.

Can I practice the use of digital signature using a PFX file?

Yes, you may use .pfx file or USB token for digital signature certificate. In both the cases, use of the greytHR signer is a mandatory requirement.

Can I generate Form 16 for employees with zero tax?

Form 16 is a certificate of TDS. If no tax is deducted for an employee, then Form 16 is not applicable for that employee. However, there is no wrong in issuing Part A of Form 16 with zero tax.
To do so, navigate to System Settings > Income Tax > Form 16 Options and clear the selection for the check box adjacent to Suppress Zero Tax.

Once this is done, you can then include the employees with zero tax, in Form 24Q and perform eTDS filing for the last quarter.

What will be my domain name, user name and password for the digital signer?

The domain name is your greytHR account URL. For example, zentransport.greythr.com. The user name and password are the same that you use to log on to the greytHR application as an Admin. We advice you to enter your proxy settings, in case the connection does not establish.

How do I generate Form 16?

greytHR enables you to generate the Form 16 statutory document easily. You can plan its various activities in the following manner:

  • Part A: this file contains the details of tax deduction and challan deposit. Go to the Part A section to upload the Part A files collected from TRACES to greytHR. View employee count of pending or uploaded forms and employee names. Know more about the uploaded Form 16 files under Details.
  • Part B: this file contains income details. Go to the Part B section to generate and sign Part B of Form 16 from greytHR. View employee count of pending or uploaded forms and employee names. Know more about the generated Part B files under Details.

To generate Form 16, navigate to the Form 16 Options page from, Payroll > Admin > Form 16. Then click Settings appearing on the right-hand corner of the page. You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 

When on this page, you can,


Generating Part A

Perform the following steps to generate Part A:

  1. In the Form 16 page, under the Part A section, click .

  2. In the Upload page, click The Upload File button. to upload the zip file. The uploaded file appears on the View page.

  3. Click Next to generate Form 16 Part A. A success message appears prompting you that Form 16 is successfully generated.

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    If you choose to merge Part A and Part B, then Part B is generated within the Part A wizard itself.

  4. In the Generated (Part B) page, select the generated details.
  5. In the Sign page, log on to the Digital Signer.

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    Download the greytHR Digital Signer if you are signing the Part B files for the first time in greytHR.

  6. Follow the process of Digital Signer to publish the files.

  7. In the Publish wizard, select the status as Signed from the Status drop-down list to view the employees whose Form 16 is ready to publish.

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    You can publish to Employee Portal or email to required employees from this page or from the Form 16 landing page.

  8. Click to exit the wizard.

Generating Part B

Perform the following steps to generate Part B:

  1. In the Form 16 page, under the Part B section, click  on the number pending or click to start the Form 16 Part B wizard.

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    If you choose to merge Part A and Part B, then Part B is generated within the Part A wizard itself.

  2. In the Generate page, select an existing batch or click The Generate New Batch button. .

  3. Follow the steps in the wizard to generate Part B and sign the Form 16 files. Once the Form 16 files are signed, you can then publish the files through the greytHR Employee Portal or email.

How to enable or disable the front page of Form 16?

To enable or disable the front page of Form 16, perform the below steps:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.

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    You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 
  3. Under the Form 16 Generation section, select (or clear the selection) the check box adjacent to Show Form 16 Cover Page accordingly.
  4. Click Save. A message appears prompting you that Form 16 Option is saved successfully.

How to enable the default view of the digital signature?

To enable the default view of the digital signature, perform the following steps:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.

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    You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 


  3. Under the Form 16 Generation section, select the check box adjacent to Use default appearance for the digital signature.
  4. Click Save. A message appears prompting you that Form 16 Option is saved successfully. 

How to generate Form 16 for the resigned employees?

Follow the same process that you follow for regular employees. This is because, all employees who have been included in the last quarter eTDS file will be considered.

Digital signature is showing as invalid. How to validate the signature?

Normally, the digital certificates are issued by a Root CA (Certification Authority). If the Root CA that issued the signing certificate is not included in Adobe Trusted Identities, the digital signature is considered as not trusted when the document is opened in Adobe Reader. However, this doesn't mean that the signature is not valid. This has nothing to do with the signing engine but with the Adobe certificate validation procedure.

 The user can validate the signature if the Root CA is already installed on Microsoft Certificate Store. As an alternative, the recipient must manually add the Root Certificate of the signing certificate on Adobe Trusted Identities. Only a few Root CA's are considered trusted by default by the Adobe certificate validation engine. Recommend to refer a step by step process to validate signature.

How to map the prerequisite components to Form 12BA?

The standard components are mapped by default. However, to view or modify the mapping follow the below steps:

  1. Navigate to System Settings > Income Tax > Advance > Form 12BA Mapping. The Form 12BA Mapping page appears.
  2. In the Form 12BA Mapping page, double click the fields under the Prequisite Item and Recovery Item columns to select the components of your choice.
  3. Click Save. A success message appears prompting you that data is saved successfully.

How do I generate Form 12BA along with Form 16?

To generate Form 12 BA along with Form 16, perform the following actions:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.

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    You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 
  3. Under the Form 16 Generation section, enable the check box adjacent to Show with Form 12 BA.
  4. Click Save. A message appears prompting that Form 16 Option is saved successfully.

How to verify whether the digital signature is installed in the system?

 To verify if the digital signature is installed in the system, check for the certificates in your browser.

How to enable the default appearance of the digital signature on Form 16?

To enable the default appearance of the digital signature on Form 16, perform the following steps:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Click the Settings button in the Current Settings panel of the page. You are taken to the Form 16 Options page.

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    You can also navigate to the Form 16 Options page from, System Settings > Income Tax > Form 16 Options. 


  3. Under the Form 16 Generation section, enable the check box adjacent to  Use default appearance for the digital signature. 
  4. Click Save. A message appears prompting you that Form 16 Option is saved successfully.

How to update the company details on Form 16?

Perform the following steps to update the company details on Form 16:

  1. Navigate to System Settings > General > Company Settings. The Company Settings page appears.
  2. In the Company address field, update the company name.
  3. Click Save. A message appears prompting you that your company information is saved successfully.

How do I release Form 16 to the employees? Where can employee see this?

  • Publish to Portal
  • Email Form 16

Perform the following actions to publish Form 16 on the portal:

  1. Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Under Publish Form 16 To Portal section, click on the number of pending employees.
  3. Check the employees who need to be informed and click The Publish to Portal button. A pop-up window displays prompting your confirmation.Click The Confirm button..

Perform the following actions to email Form 16 to employees:

  1.  Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
  2. Under Publish Form 16Via Email section, click on the number of pending employees.
  3. Check the employees who need to be informed and click The Email Form 16 button. A pop-up window displays prompting your confirmation.Click The Confirm button..
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You can view the employees who have signed Form 16 by selecting the status as Signed from the Status drop-down list.

The employee details now appear under the status of Published or Emailed based on the mode of publishing. Form 16 is now available in the Employee Portal or mailbox of the selected employee as per the mode of publishing that was selected.

How to verify Form 16?

The Part A of Form 16 comes directly from the Income Tax site. The Part B of Form 16 is generated internally from greytHR, extracting the data from your IT Statement/IT Declaration. You can verify your Form 16 using the IT Statement/IT Declaration in greytHR. However, you can also refer Form 26AS online to verify Form 16.

How to change the location and date of the digital signature?

The date of the digital signature, is automatically taken from the e-token installed during the generation of Form 16. The location for the digital signature is defined by the TDS circle of the organization.

How to change the date and location of the generated Form 16?

To change the date and location of the generated Form 16, perform the below steps:

  1. Navigate to System Settings > Income Tax > Form 16 Options. The Form 16 Options page appears.
  2. Under the Particulars of the person responsible for form 16 section, type the location in the Digital Signature text box.

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    Ensure that you select the Use above location as signing location check box and then save your changes.

  3. Under the Form 16 Details section, type the date in the Signing Date text box. 
  4. Click Save. A message appears prompting you that Form 16 Option is saved successfully.

Related link

You can also watch how to generate Form 16 from the video below or by clicking here

 

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