Answer: A. Salary TDS certificate. Form 16 is the employer’s certificate of tax deducted at source on salary under the 1961 Act.
Who normally issues Form 16 to an employee?
A Employee’s bank
B Employer
C Income-tax return preparer
D The employee’s landlord
Answer: B. Employer. The employer issues Form 16 to the employee for salary TDS.
What tax information does Form 16 document?
A Only bank deposits
B Business expenses only
C Salary and TDS details
D GST paid on purchases
Answer: C. Salary and TDS details. Form 16 records salary information and tax deducted at source, along with relevant tax computation details.
How often is Form 16 generally issued for salary TDS?
A Every week
B Only when requested by bank
C Once in a lifetime
D Annually
Answer: D. Annually. Form 16 is an annual salary TDS certificate for the financial year.
What does Part A of Form 16 mainly show?
A TDS deducted and deposited
B Detailed salary computation
C Only investment proofs
D The employee’s bank balance
Answer: A. TDS deducted and deposited. Part A contains the tax deduction and deposit details reported for the employee.
What does Part B of Form 16 mainly contain?
A Only employer’s TAN
B Income and tax computation details
C Quarterly bank statements
D A tax refund request
Answer: B. Income and tax computation details. Part B (annexure) contains salary and related income computation details.
Which parts make up the traditional Form 16 certificate?
A Part B and Part D
B Schedule EI and FSI
C Part A and Part B
D Form 16A and Form 26AS
Answer: C. Part A and Part B. The traditional Form 16 has Part A for TDS details and Part B for income computation details.
If an employee worked for one employer all year, what may annual Part A contain?
A Only the final month’s salary
B Only investment declarations
C Only the employer’s address
D TDS details for all quarters
Answer: D. TDS details for all quarters. The prescribed Form 16 sample states that Part A issued for the fourth quarter can contain the year’s quarter-wise TDS details.
What happens when an employee changes employers during a financial year?
A Each employer covers its period
B Only the first reports TDS
C Employee loses Form 16 rights
D Final employer erases earlier salary
Answer: A. Each employer covers its period. Each employer issues Part A for the period of employment; Part B may be issued by each employer or the last employer at the employee’s option.
For a multiple-employer year, who may issue Part B under the prescribed Form 16 sample?
A Only the first employer
B Each or last employer
C The employee’s bank
D The tax-return preparer
Answer: B. Each or last employer. The sample allows each employer or the last employer to issue Part B, at the employee’s option.
Which information should match the employee’s identity on Form 16?
A GSTIN
B Passport visa number
C Employee PAN
D Vehicle registration
Answer: C. Employee PAN. The certificate includes the employee’s PAN and employer’s identifying details.
What identifier for the employer appears on Form 16?
A IFSC
B Aadhaar only
C GST e-way number
D TAN
Answer: D. TAN. The certificate records the employer’s TAN as the deductor’s tax identifier.
Which certificate is used for TDS on non-salary income under the old Act?
A Form 16A
B Form 16
C Form 12BB
D Form 141
Answer: A. Form 16A. Form 16A is the TDS certificate for income other than salary under the 1961 Act.
Does Form 16 replace filing a required income-tax return?
A Yes, for every employee
B No, it is supporting information
C Only if tax was deducted
D Only if refund is due
Answer: B. No, it is supporting information. Form 16 supports tax-return preparation but does not replace an income-tax return required by law.
Can an employee use Form 16 to review salary income reported by the employer?
A No, it only shows PAN
B Only when changing jobs
C Yes, compare its figures
D Only after a tax notice
Answer: C. Yes, compare its figures. Part B provides salary and tax computation information that the employee can compare with payroll records.
Which Part B entries can help explain taxable salary?
A Only the employer’s address
B Only TDS deposit dates
C Only the employee’s PAN
D Salary, exemptions, and deductions
Answer: D. Salary, exemptions, and deductions. Part B presents salary and relevant exemptions, deductions, and income computation details.
Why should an employee compare Form 16 with payslips?
A Spot missing or incorrect amounts
B To raise the TDS rate
C To change the financial year
D To create an exemption
Answer: A. Spot missing or incorrect amounts. Comparing payroll records with the certificate can reveal omitted salary, deductions, or tax details.
What should an employee do if Form 16 salary figures appear incorrect?
A Change the figures without records
B Ask employer to review them
C Ignore all salary income
D Claim a larger TDS credit
Answer: B. Ask employer to review them. The taxpayer should reconcile source records and ask the employer to correct errors; inaccurate figures should not be copied blindly.
How should an employee check TDS shown on Form 16?
A Compare it with rent alone
B Use only a bank SMS
C Match official tax records
D Ignore the deposit details
Answer: C. Match official tax records. The employee should reconcile the certificate with AIS and other official tax records for the same period.
If Form 16 shows TDS missing from AIS, whom should the employee contact?
A The landlord
B The credit-card company
C The local bank manager
D Employer or deductor
Answer: D. Employer or deductor. The deductor may need to correct the TDS statement so the information appears correctly in official records.
Why is the employer’s TAN relevant on Form 16?
A It identifies the deductor
B It identifies the employee’s bank
C It sets the tax slab
D It proves rent payment
Answer: A. It identifies the deductor. TAN identifies the tax deductor in TDS reporting and helps link the certificate to the employer.
For FY 2025–26 income filed as AY 2026–27, which Act governs Form 16 reporting?
A Income-tax Act, 2025
B Income-tax Act, 1961
C Goods and Services Tax Act
D Companies Act, 2013
Answer: B. Income-tax Act, 1961. The Department states that FY 2025–26 income is filed for AY 2026–27 under the 1961 Act.
What period does traditional Form 16 generally cover?
A A calendar week
B A tax quarter only
C A financial year
D A five-year period
Answer: C. A financial year. Traditional Form 16 summarizes salary and TDS for the relevant financial year.
How can Form 16 assist with an income-tax return?
A Automatically files the return
B Selects the tax regime
C Guarantees a refund
D Provides salary and TDS inputs
Answer: D. Provides salary and TDS inputs. The certificate supplies salary and TDS information useful for preparing and checking the return.
Does a Form 16 entry guarantee that a deduction is legally allowable?
A No, eligibility still matters
B Yes, employer entry is final
C Only for investments
D Only for government employees
Answer: A. No, eligibility still matters. Taxpayers should verify deductions and exemptions against the rules and their selected regime.
What should an employee do with Form 16 after receiving it?
A Discard it after reading
B Review and retain it
C Send it to the bank
D Use it as PAN
Answer: B. Review and retain it. Reviewing and retaining Form 16 helps with return preparation, reconciliation, and later verification.
Where is Part B of the Form 16 certificate issued by the employer?
A Employee’s bank prepares it
B The deductee creates it
C Employer provides it
D A landlord files it
Answer: C. Employer provides it. The prescribed certificate identifies the employer as the issuer of Part B.
What does the TDS summary in Part A help verify?
A Taxable rent paid
B Personal investments only
C The employee’s net worth
D Tax deducted and deposited
Answer: D. Tax deducted and deposited. Part A summarizes TDS deducted and deposited for the employee.
Which statement about Form 16A is correct?
A It covers non-salary TDS
B It is the salary certificate
C It is an income-tax return
D It replaces Form 16
Answer: A. It covers non-salary TDS. Form 16A is used for TDS on non-salary income under the old Act.
If there was more than one employer, should earlier salary be ignored in the return?
A Yes, report only final salary
B No, include all salary
C Only TDS is reportable
D Only the last payslip matters
Answer: B. No, include all salary. The return should account for salary from all employers during the year; Form 16 from each employer helps reconcile it.
Can Form 16 include income from another employer reported for TDS?
A No, never
B Only for a contractor
C Yes, where reported
D Only after assessment
Answer: C. Yes, where reported. The prescribed Part B format can include salary reported from other employers for TDS computation.
What other income might an employee report to the employer for salary TDS?
A Credit-card rewards
B Personal loan principal
C Monthly grocery spending
D House-property income or loss
Answer: D. House-property income or loss. The Form 16 sample includes other income reported by the employee for salary TDS, including eligible house-property income or loss.
Why should deductions in Form 16 be checked against proof?
A Employer estimates may need correction
B Proof changes the PAN
C Deductions are always final
D TDS removes eligibility rules
Answer: A. Employer estimates may need correction. Employees should check claimed amounts and eligibility; employer payroll calculations do not replace the taxpayer’s legal responsibility.
Does Form 16 by itself determine the final refund?
A Yes, any TDS means refund
B No, income and credits matter
C Only Part A decides
D Only Part B decides
Answer: B. No, income and credits matter. Final tax or refund depends on the complete return, all income, eligible claims, tax credits, and applicable law.
What does Part A help confirm across quarters?
A Every salary payment was exempt
B All expenses were approved
C Deducted tax was reported
D The employee changed jobs
Answer: C. Deducted tax was reported. Part A records TDS details reported by the employer, which can be checked against official records.
Which online portal is used to generate or download Form 16 Part B under the old process?
A GST portal
B MCA portal
C Aadhaar portal
D TRACES
Answer: D. TRACES. CBDT’s prescribed process provides for generation and download of Part B through the TRACES portal.
If the employee’s PAN is wrong on Form 16, what is the best next step?
A Ask employer to correct records
B Edit the PDF yourself
C Claim someone else’s TDS
D Ignore the mismatch
Answer: A. Ask employer to correct records. The employer should correct the deductor’s filing or certificate so the employee’s PAN and TDS records match.
What should be checked when Form 16 covers only part of the year?
A Only the annual tax slab
B Employer service dates and salary
C The landlord’s PAN
D The employee’s travel dates
Answer: B. Employer service dates and salary. For a part-year employer, check the period of employment and reconcile salary and TDS for that period.
If an employee receives salary in March 2026, which TDS law applies to that payment?
A Income-tax Act, 2025
B Both Acts twice
C Income-tax Act, 1961
D No TDS law
Answer: C. Income-tax Act, 1961. The Department’s transition FAQ says salary paid before 1 April 2026 is governed by the 1961 Act.
For salary paid from April 2026, what should taxpayers verify before using old Form 16 guidance?
A Only the prior year’s slab
B The old Form 16 unchanged
C A GST invoice
D Current 2025 Act forms
Answer: D. Current 2025 Act forms. The 2025 Act and new tax-year framework apply from April 2026, so use the current forms and guidance for that period.
Why should FY 2025–26 and Tax Year 2026–27 records be kept separate?
A Different Acts govern each period
B TDS is not reported
C Salary becomes exempt in April
D PAN changes each year
Answer: A. Different Acts govern each period. The Department instructs taxpayers to maintain a clear distinction between FY 2025–26 under the old Act and Tax Year 2026–27 under the new Act.
What does Form 16 not show by itself?
A Salary information
B Every income source
C Employer-reported TDS
D Certain salary deductions
Answer: B. Every income source. Form 16 covers salary and employer-reported details; other income and tax credits may need separate reporting.
Can Form 16 be used to check whether TDS was deposited?
A No, it shows only salary
B Only Part B has TDS
C Yes, reconcile Part A
D Only a bank can confirm
Answer: C. Yes, reconcile Part A. Part A includes tax deduction and deposit details that should be reconciled with official tax records.
What is a sound response to a Form 16 and AIS mismatch?
A Claim both amounts twice
B Delete the AIS entry
C Wait for a refund
D Reconcile, then contact employer
Answer: D. Reconcile, then contact employer. Compare the certificate and AIS, then ask the employer or deductor to correct any reporting mismatch.
Why does Form 16 include employer and employee identifiers?
A Link certificate and tax records
B To calculate rent allowance
C To set the tax rate
D To replace salary details
Answer: A. Link certificate and tax records. PAN and TAN help identify the deductee and deductor in tax reporting.
Should a taxpayer report exempt salary allowances exactly as shown without checking?
A Yes, payroll is always final
B No, verify applicable conditions
C Only if signed
D No, omit all allowances
Answer: B. No, verify applicable conditions. Verify that salary exemptions shown in Part B meet the applicable rules and are supported by correct details.
What is the relationship between Form 16 and the employee’s return?
A A substitute return
B A tax payment challan
C A source document for filing
D A certificate of residence
Answer: C. A source document for filing. Form 16 is a source document to help prepare and reconcile the employee’s income-tax return.
Which official source should resolve Form 16 questions for AY 2026–27?
A An undated social post
B A generic bank FAQ
C A payroll discussion forum
D Income Tax Department guidance
Answer: D. Income Tax Department guidance. Use current Income Tax Department guidance for the relevant Act, assessment year, and certificate.
What is the main purpose of reviewing Form 16 carefully?
A File accurate income and credits
B Increase the employer’s TDS
C Avoid reporting other income
D Change the tax law
Answer: A. File accurate income and credits. Careful review helps ensure salary, exempt amounts, deductions, and TDS credits are accurately reported.
Which document does an employee submit to an employer with claims for salary TDS?
A Form 16
B Form 12BB
C Form 16A
D Form 26AS
Answer: B. Form 12BB. Form 12BB is used by an employee to provide particulars and evidence of claims to the employer for salary TDS; Form 16 is issued by the employer.