Form 16 is a summation of the basic pay, allowances, tax deductions, and incentives given to a salaried person in a financial year.
It is an essential document needed while filing one's income tax returns. Now, the onus to correctly generate and distribute Form 16s to the employees lies on the employer. However, it is understandable that companies with hundreds of employees usually find it challenging to make, merge, sign and distribute the Form 16s in such a big number.
Not only this, many new companies; especially startups, and their employees are not aware of the legal mandate for a Form 16. And ignorance of the law doesn't protect anyone from penalization! Enter ClearTax.
The Bangalore-based fintech startup has created an offline utility to make customized and automated Form 16s in bulk, complete with the company logo and employee details.
The ClearTax form 16 generator works in 3 simple steps: It auto-imports Form 16 Part A data from TRACES, creates form 16 Part B with annexure and auto merges both the files to generate the complete Form 16.However, the highlight of this product, is the digital signing feature, which saves time and effort for the employer by reducing manual intervention. A digital signature token can be used to sign all the forms in minutes and they are emailed in bulk to the employees. The information on these forms is password-protected and safe, and only the recipient can access it.
In a singular move, ClearTax has converted an extensive and tedious process into something that can be done in minutes. Archit Gupta, CEO and Founder of ClearTax, is happy about how well the utility fared in the last year. "Form 16 generation, whether you rely on CA consultants or an internal team, is a slow and expensive affair.
This is particularly true for young companies still finding their feet. The ClearTax tool caters to start-ups and SMEs, helping them restructure their entire process and bid adieu to issues regarding use of multiple software's and diverse file formats," said Gupta.