Tax Update: It's not just about ITR filing! 4 surprising benefits of Form 16..
We often think that Form-16 is only used for filing tax returns. Most employed people receive it every year from their companies, and upon receiving it, we simply use it when filing their ITR. But did you know that it's not just a tax document, but a financial passport? In fact, Form-16 proves your financial credibility and is useful in many situations that people often don't know about.
So today, we'll tell you how Form-16 can be used not just for ITR, but for four major purposes. So, if you keep it safe, it already reduces half your problems.
First, understand what Form-16 is.
Form-16 is a certificate issued by your employer, containing complete information about your annual salary, tax deductions (TDS), and tax payments. It is also considered proof of income, so it's important to keep it safe at all times.
Why is it important for ITR filing?
The start of the new financial year brings the ITR filing frenzy. Taxpayers typically have until July 31st each year to file their ITR. So, whether you choose the old tax system or the new tax system, Form-16 plays a vital role in both. Beyond this, Form-16 also plays a vital role in making your life easier.
Let's explore four major benefits of Form-16 beyond ITR:
1. Visa Application Help
If you're applying for a visa for foreign travel, study, or work, you need to prove your financial stability. Here, Form-16 serves as proof of income. Essentially, it demonstrates that you have a regular income and can afford to travel abroad, making the visa process easier.
2. The Most Reliable Documents for Loan Applications
When you apply for a home loan, personal loan, or car loan, the bank or NBFC wants to know:
What is your income?
Is your income regular?
Will you be able to repay the loan?
So, if you don't have payslips or other income documents, Form 16 can be used as proof of income. This increases the chances of loan approval.
3. TDS and Salary History Required When Changing Jobs
If you change jobs, the new company will ask for your previous salary and tax details. If you don't have salary slips, Form-16 provides accurate information about all your TDS and annual income, making your job transition easier.
4. It's also useful for applying for a credit card.
Credit card issuing companies want to know the customer's regular source of income to determine whether the card bill will be paid on time. Therefore, if a salary slip or bank statement is not available, Form-16 is accepted as strong proof of income.
Income Tax Conclusion
Form-16 is not a simple document, but a proof of your financial identity.
Don't just tuck it away in a folder after filing your ITR.
Keep it safe, because:
- Visa
- Loans
- Job changes
- And credit cards —
It helps you move forward with ease and strength in all these areas.
Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
