Can one claim deduction or exemption if missed in form 16?

When salaried people file their final proofs relating to tax, if an employee fails to file any detail, the deduction claimed by him is not granted by the employer. It is considered that expenses qualifying for tax deduction have not been incurred. As a result, the employee has to pay a higher tax and will get less amount of salary in the next few months of that year.

As such, one should plan his taxes accordingly. It is necessary to submit the proofs to the employer and claim to get the benefit of tax deduction in the Form 16 to reduce the tax burden.

Importance of from 16:

An Employer has to issue Form 16 or the salary certificate to all of his employees for every financial year that is for the period starting from April to March. Form 16 or the salary certificate gives details of the salary of the employee with the TDS or Tax Deducted at Source. It also states the net income of the employee.

Every salaried person should declare all the investments made by him which are eligible for the deduction to his employer. Examples of such deductions or exemptions are Insurance Premium, educational expenses of children, contribution to PPF, Investment in tax free instruments, donations, home loan, etc. The employer is liable to deduct TDS within the due date of filing TDS Return. Through this an employee can claim tax benefits. This is applicable if the estimated salary is more than the exemption limit.

If expenses are not declared in form 16:

If an assessee fails to declare any detail of the investments made by him or fails to mention the details of pending receipts or fails to mention the details of tax investments to his employer which are eligible for deduction, it will result into more deduction of taxes by employer.

There is a wrong conception among the salaried people that if they fail to declare their investments to their employer before deducting TDS, they cannot claim deductions or exemptions later on. To clear this wrong notion, it can be said that an employee can still claim deductions and can also claim the extra tax deducted by his employer as refund.

One is required to file his income tax return and claim all the deductions missed by him while filing the return for the concerned financial year. One should keep records of tax investments with him, in case if the employer fails to deduct taxes or deducts extra taxes. In such cases an assessee has to use his salary certificates for claiming refunds.

Only deduction of TDS and having Form 16 is not sufficient. Assessees should file their return of income within the due date i.e., 31st July, declaring total income, and pay taxes or claim refunds, if any.