We do service in private sectors, public sectors or Government sectors and for this we earn money & draw salary on a monthly basis. So it is our duty to pay income tax based on our annual income. Government has already defined tax rates slab based on income and this rate is revised from time to time in an financial year. Therefore while an Organization deducts a roughly calculated tax on a monthly basis from our salary, the final tax is calculated on a financial year from April to next year March months. At the end of the each current financial year everyone has to file an Income Tax(IT) where a Form 16 comes into the picture. A Form 16 draws every detail of your salary, investments and deductions so that it is transparent to you.
The following images show the main important parts of Form 16
Thanks for reading.Tags: Income Tax • Investments