Income Tax

Difference between Form 16 and Form 16A

Difference between Form 16 and Form 16A

Form 16 and Form 16A are important for taxpayers. They play a vital role in determining the payable amount of tax. Form 16 and Form 16A are necessary for filing income tax returns. They serve almost similar purposes, so taxpayers often get confused between the two documents. However, to make the most of the use and to ensure a smooth tax filing experience, taxpayers should know the point of difference between Form 16 and Form 16A and their purpose.

What is Form 16?

Form 16 is a certification comprising information used to file Income Tax Returns. As per section 203 of the Income Tax Act, 1961, the employers issue this certificate to the employees. Form 16, also known as a salary certificate, consists of details related to the salary paid in a particular financial year. In addition to this, it also states how much TDS has been deducted from the salary of the employee. This form is only issued when an employee’s annual income is greater than the tax exemption threshold and is liable for TDS.

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Contents of Form 16

Form 16 typically comprises two broad parts: Form 16 Part A and Form 16 Part B. It includes details such as:-

  1. Proof of Income
  2. PAN and TAN details of the employer
  3. PAN details of the employee
  4. Tax paid on employee’s behalf
  5. Payment acknowledgement number
  6. Education surcharge and cess

How can I get Form 16?

Step 1: Visit the website of the Income Tax Department

Step 2: Register on the website

Step 3: Click on the “Download” option

Step 4: Choose Form 16

Step 5: Choose the correct financial year for which Form 16 is required

Step 6: Enter PAN, choose Add, and then select “Go” to continue

Step 7: To download from 16, click on “Submit”

What is Form 16A?

Form 16A is a certificate of tax deducted at source. As per Section 203 of the Income Tax Act 1961, it is issued by employers every quarter. Usually, payouts exceeding INR 30,000 are subject to TDS and cannot claim deductions. This document offers a fair idea of the amount of TDS deducted from non-salary income sources such as rent, professional charges, commission, etc. Usually, the 15th day of a month is the due date, and it is succeeded by the quarterly TDS return due date. The rate of TDS depends on sources other than salary.

Components of Form 16A

The components of Form 16A include:-

  1. Employer’s Name, PAN and TAN
  2. Employee’s Name, PAN and TAN
  3. Payment details
  4. TDS payment number
  5. Date of deposit and deposited tax amount

The exact details are also available under Form 26AS.

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What is the method for obtaining Form 16A?

Step 1: Log in to TRACES and provide PAN, TAN and other information.

Step 2: Navigate to Form 16A-Select form 16A from the download menu after logging in.

Step 3: Choose a financial year for which the TDS certificate is required and enter your PAN. Form 16A requests may be made by the deductor using Bulk PAN or Search PAN.

Step 4: Information about the authorised person will appear when you click on “submit”. A preview of the profile information will be created and printed off.

Step 5: Choose one of the two KYC validation options available. The user must choose one of the two alternatives.

Step 6: After the KYC validation is complete, a success page appears with two request numbers that may be downloaded from the website.

Step 7: Find the specified download location – TO see all requests, enter the Request Number and Date or choose View All. Select the relevant row if the status reads “Available”, and click on the download button.

Step 8: Download the TRACES tool; from the drop-down option, choose HTTP1 Download. A zip file containing the file is downloaded. The file doesn’t need to be extracted. Go to Downloads, then request downloads to obtain it. Use the button “Click here” to begin.

Step 9: Enter a verification code, then click Traces to download the Form 16A utility.

Step 10: Open the JAR file after entering the zip file. Enter every piece of information required to download form 16A.

Difference between Form 16 and Form 16A

The most basic differences between Form 16 and Form 16A are as follows:-

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ParametersForm 16Form 16A
DescriptionIt is a certificate that details tax deducted at source from taxable salary income.It is a certificate that details tax deducted at source from non-salary earnings.
EligibilitySalaried individuals with regular income.Self-employed or other professionals.
IssuerThe employer issues the TDS certificate.The TDS certificate is issued by financial institutions, banks, tenants, etc.
Issued againstIt is issued against salaried employees.It is issued against non-salaried employees.
Frequency of issuanceIt is issued annuallyIt is issued quarterly
Applies toForm 16 applies to dividends, interest on securities, etcForm 16A applies to rent, professional charges, commission agents, hired machinery, etc.
ComponentsIncome ProofEmployer’s PAN DetailEmployer’s TAN detailsEmployee’s PAN detailsTax PaidPayment acknowledgementEducation cessSurchargesEmployer’s bank and TAN detailsEmployee’s PANTax PaidTDSTDS payment receipt number
Abiding LawSection 203 of the Income Tax Act of 1961 is concerned with TDS on chargeable earnings.Section 203 of the Income Tax Act 1961 is concerned with TDS on non-salary earnings.
Relationship with Form 26ASOnly the TDS details of Form 16 are available in Form 26AS.All details in Form 16A are available in Form 26AS.
VerificationForm 16 can be verified on the online portalForm 16A can be verified on the online portal.

Conclusion

Form 16 and Form 16 A help in the timely computation and submission of Income Tax Return. Taxpayers familiar with Form 16 and Form 16A must appreciate their significance and use them effectively. Various small and significant changes need to be considered before submitting this form. All must confirm their category and register their financial records accordingly.

FAQs

  1. Is Form 16A the same as Form 16?

    No, Form 16A is not the same as Form 16.

  2. What is form 16 and form 16A?

    Form 16 is a certificate giving the details of tax deducted at source from taxable salary income. In contrast, Form 16A is a certificate giving the details of tax deducted at source from non-salary earnings.

  3. Who is eligible for Form 16A?

    Self-employed or other professionals are eligible for Form 16A.  

  4. Is it mandatory to give Form 16A?

    Yes, it is mandatory to issue Form 16A to the taxpayer.

  5. What is the use of Form 16A?

    Form 16A provides details of TDS or TCS for various transactions between the deductor and the deductee.

  6. Is it mandatory to file Form 16?

    Yes, an employer must issue Form 16 to the employee whose income is subject to TDS.

  7. What is the use of Form 16?

    Form 16 makes it easier for a taxpayer to file income tax returns.

References

  1. https://en.wikipedia.org/wiki/HTTP

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