Form 16 is the prescribed form for tax deducted at source from salary by an employer. There is confusion regarding the issue of TDS certificate in case where salary is not taxable. Tushar Singh of New Delhi asks “in my last company my income was not taxable. Am i eligible for form 16 from my last company.Please tell me the way of getting a form 16 as i need it to apply for car loan ” .
This issue was already explained earlier in posting Can Employer Decline To Issue Form 16? .
Confusion arises among employees regarding Form 16 is on following grounds :
- That they think Form 16 is a salary certificate.
- That income tax Return can not be filed in absence of Form 16
Both the aforesaid “general impression about Form 16? are wrong. Form 16 is the prescribed form for issue of certificate of deduction of tax at source from an employee. employer can decline to issue Form 16 in case there is no deduction of tax at source.It is clear from a bare reading of section 203 of the I T Act and the relevant rule 31 of IT Rule.
Solution to your problem
The loan creditor bank is just want to check the fact about your earning capacity. Go and talk to your employer company , if they issue Form 16 , its okay , otherwise you request to issue a Salary Certificate which will prove how much salary was received by you from them.