Preparation and issuance of employees’ Form 16s is the cumbersome task at the end of every financial year. Traditionally, these forms have been signed and delivered manually; this whole process is time consuming, expensive, and cumbersome. Additionally, there are increased possibilities of getting these forms lost, or misplaced, resulting in re-issuance. And for re-issuance one has to again undergo time-consuming processes.
Considering today’s scenario, no organization can afford to waste time, manpower, and paper on such processes. And as organization are going online with most of their processes, manual signing of Form 16s still looks like resource wastage. Therefore, the concept of digitally signing Form 16s is gaining momentum, allowing organizations to save time, money, and manpower, for important and critical operations. This not only helps in time management, but for getting enhanced Return on Investment (ROI).
Anything, which is legal, takes less time to become popular and stable in any form of social or business environment. In case of digitally signing of Form 16s, the Indian Information Technology Act 2000 recognizes the use of ‘Digital Signatures’ as equivalent to ‘Physical Signatures’. How to get Class 2 Digital signature Therefore, a digitally signed Form 16 has the same legal validity as a physically signed one. Besides, as per Circular No. 2/2007 dated 21/5/2007 from the Income Tax Dept, “The Central Board of Direct Taxes have, therefore, in exercise of powers under section 119 of the Income-tax Act, 1961, decided for the proper administration of this Act to allow the deductors, at their option, in respect of the tax to be deducted at source from income chargeable under the head ‘Salaries’ to use their digital signatures to authenticate the certificates of deduction of tax at source in Form 16.”
This has encouraged various digital signature solutions providers, like E-Lock, to meet the critical requirement of Form 16 signing with their fast and easy-to-use products. Enabling users to digitally sign thousands of Form 16s within a few minutes, and allowing them to go paperless, these solutions enhance the security and reliability of the entire process. Adding more to the signing process, E-Lock solutions allow users to e-mail these digitally signed Form 16s to individual recipients in one go, cutting down on the delivery costs. Therefore, users/organizations get double benefits in one single solution, which means higher ROI.