Form 16 for Loan: Understanding Its Function and How to Get It

As a salaried employee, you must have heard of Form 16. It is a certificate that you receive from your employer that serves as proof that tax was withheld at the source and lodged with the appropriate government authorities on your behalf. While Form 16 is necessary for filing tax returns, it is also useful for loan purposes.

Purpose of Form 16 for Loan Purposes

Form 16, provided by the Income tax Department of India, is useful for loan purposes in the following ways:

  1. Verifying Eligibility and Creditworthiness: Financial institutions require documentation to verify your eligibility and creditworthiness for loan approval. Form 16 can come in handy as it provides details of your salary, including bonuses and allowances, and your tax-saving investments declared by you to your employer. This information helps lenders assess your loan application.
  2. Assessing Income Tax Liability: Form 16 gives a breakup of your salary and your tax liabilities. This information is crucial while filing your Income Tax Returns online. It also helps lenders assess your financial position and determine the credit limit for the borrower.
  3. Determining Credit Limit: Financial institutions use Form 16 to determine the credit limit for the borrower. A high income may enable a customer to take advantage of a higher credit card limit.

Components of Form 16 for Loan Purposes

Form 16 consists of two parts: Part A and Part B. 

Part A of Form 16 contains the following details:

  • Name and address of the employer
  • Name and address of the employee
  • Permanent Account Number (PAN) of the employer and employee
  • Assessment Year
  • Period of employment with the employer
  • TDS deducted and deposited with the government.

Example of Form 16 Part A

Part B of Form 16 contains the following details:

  • Gross salary
  • Exemptions under Section 10 of the Income Tax Act
  • Deductions under Section 16 of the Income Tax Act
  • Taxable income
  • Tax deducted at source (TDS)
  • Education cess and surcharge

Example of Form 16 Part B

How to Download Form 16?

Step 1- Contact Your Employer: The first step is to reach out to your employer’s HR or payroll department. They are responsible for generating and issuing Form 16 to all employees.

Step 2- Request Form 16: Inform your HR or payroll department that you need your Form 16 for a loan application or for income tax purposes. They will guide you on the process to obtain it.

Step 3- Provide Necessary Information: Your employer may request specific information, such as your employee ID, PAN (Permanent Account Number), and other details, to ensure they provide the correct Form 16.

Step 4- Digital Portal or Email: Many companies have digital employee portals or email systems where they provide access to important documents, including Form 16. Check if your employer offers such a service.

Step 5- Download from Portal: If your employer provides a digital portal, log in using your employee credentials and navigate to the relevant section for tax-related documents. You should find an option to download Form 16.

Step 6- Collect Physical Copy: If your employer issues physical copies of Form 16, they might distribute them at the workplace or send them to your registered address. Be sure to collect and retain it for future usage and tax purposes.

Step 7- Verify Details: Once you have Form 16, verify the details such as your name, PAN, income details, TDS deducted, and other relevant information. Ensure that all the information is accurate.

Step 8- Use for Loan Application: If you need Form 16 for a loan application, submit a copy of the document along with other required financial documents to the lender.


In summary, Form 16, although primarily tied to taxes, plays a vital role in loan applications for salaried employees. It serves as a comprehensive proof of income, aiding lenders in assessing eligibility and creditworthiness. Comprising two parts, Part A provides essential employment and PAN details, while Part B details the financial landscape—gross salary, deductions, exemptions, taxable income, TDS, and more. 

Acquiring Form 16 for loans involves contacting your employer’s HR, who may offer digital or physical access. This document’s multifunctional nature extends beyond taxes, offering a pathway to smoother loan evaluations. Recognizing Form 16’s dual significance empowers individuals to leverage it effectively in securing essential financial support.


Frequently Asked Questions (FAQs):

Finnable has set a required minimum age for personal loan of 21 years for individuals to be eligible for a personal loan. This ensures that applicants have reached legal adulthood and are capable of entering into a financial agreement.

Yes, Finnable understands the financial needs of young borrowers and offers personalised loan options tailored to their specific requirements. Whether it's financing higher education, purchasing essential items, or starting a business venture, Finnable provides support to young individuals seeking financial assistance.

Borrowers nearing retirement may have unique financial needs, such as retirement planning, medical expenses, or supporting their children's education. Finnable offers personalised loan solutions that consider the specific circumstances of pre-retirement individuals, helping them meet their financial goals.

Unfortunately, no. Finnable does not, at the moment, offer any loans to senior citizens. Currently, 60 is the maximum age for personal loans set by Finnable

Other than personal loan age limits, Finnable considers various other factors for determining loan eligibility. These factors may include the applicant's income, credit score, repayment capacity, and employment stability. By assessing these aspects comprehensively, Finnable ensures that borrowers across different age groups can access the loan products that best suit their financial needs. 


Amit Arora

I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
Finnable Logo