Income Tax Taxation

What is the Difference between Form 16 and Form 16A?

Form 16 and Form 16A are crucial for taxpayers due to their essential role in determining the payable tax amounts. They come in handy while filing Income Tax Returns. One can get confused between the two hence it is essential to understand the difference between the two that will help you to file returns smoothly. In this article, we shall discuss the main difference between the two forms.

What is Form 16?

Form 16 is a certification that provides the essential information which is used to file ITRs. Employers issue this certificate to their employees according to Section 203 of the Income Tax Act.

It is also called salary certificate. Form 16 comprises of details related to salary paid in a financial year. It lays down how much TDS is deducted from the salary of the employee. This form is only issued when the annual income of an employee exceeds the tax exemption threshold and is liable for TDS.

Components

Form 16 has two broad parts called Part A and Part B. This document includes details such as:

• Income Proof;
• Details of PAN and TAN of an employer;
• Employees’ PAN details;
• Tax paid on the behalf of employee;
• Payment acknowledgement number;
• Education surcharge and cess.

What is Form 16A?

Form 16A^[1] is also certificate of TDS, and it is issued by employers every quarter according to Section 203 of the Income Tax Act 1961. The form provides a fair idea of the TDS amount deducted on non-salary income sources such as rent, professional charges etc.

The 15^th day of the month is the due date and is succeeded by quarterly TDS return due date. Here the TDS rate depends on the type of income arising sources other than salary.

Components

The components of Form 16A include details such as:

• Employer’s name, PAN and TAN;
• Employees’ name, PAN and TAN;
• Details of payment;
• TDS payment number;
• Deposit date and tax amount deposited.

These details can also be fetched from Form 26AS.

Major Difference between Form 16 and Form 16A

There are certain significant differences between these two forms. We have discussed some of the major differences in the table made below.

BASIS OF DIFFERENCE	FORM 16	FORM 16A
Description	It is a certificate that provides the details of the tax deducted at source from taxable salary income.	It is a certificate providing the details of the tax deducted at source from the non-salary earnings.
Eligibility	Salaried individuals with regular income	Self-employed or other professionals
Who issues it?	The employer issues this TDS certificate	This certificate is issued by financial institutions such as banks etc.
To whom issued?	It is issued against salaried employees	It is issued against non-salaried employees
When issued?	Issued annually	Issued quarterly
Applies to whom?	Form 16 applies to dividends, interest on securities etc.	Form 16A applies to rent, professional charges, commission agents, etc.
Components	Income Proof;Details of PAN and TAN of an employer;Employees’ PAN details;Tax paid on the behalf of employee;Payment acknowledgement number;Education surcharge and cess	Employer’s name, PAN and TAN;Employees’ name, PAN and TAN;Details of payment;TDS payment number;Deposit date and tax amount deposited.
Abiding law	Section 203 of the Income Tax Act concerned with TDS on chargeable earnings.	Section 203 of the Income Tax Act concerned with TDS on non-salary earnings.
Relation with Form 26AS	Only the details of TDS of Form 16 are provided in Form 26AS	All details contained in Form 16A are available in Form 26AS
Verification	This form can be verified on the online portal	This form can also be verified on the online portal.

Relation between Form 16 and Form 26AS

Both these forms may look similar, but Form 26AS is used for verifying the details provided under Form 16 and its components, along with the information about deductions from salary and other income sources.

Conclusion

Both Form 16 and Form 16A are vital forms for taxpayers under the Income Tax Act. It helps in verifying crucial income details and also helps to know the TDS rate and the amount of TDS deducted. One can use the income data and TDS in Form 16 and Form 16A to file ITR and calculate and pay your tax. Apart from the differences there are certain similarities between the two forms, such as both forms are provided under the same section (203 of the Income Tax Act 1961), and both forms can be downloaded online and verification of both can also be done online. For smooth filing experience, taxpayers should be abreast of this information.

Read our article:Filing ITR Online without Form 16: Step by Step Procedure