Form 16 & 16A – All Differences You Need To Know​

Form 16 & Form 16A - All Differences You Need To Know

Introduction

Filing income tax returns above a certain threshold is required. Form 16 is crucial since it serves as financial verification for tax payments and deductions made to the government. Forms 16 and 16A are issued in accordance with Section 203 of the Income Tax Act of 1961. However, before we can understand how these forms differ, we must first understand their components and the information they provide.

Form No.16 Components

In layman’s words, Form 16 is the TDS certificate supplied to salaried individuals on the amount deducted as tax by the deductor. Form 16 is further subdivided into two sections: part A and part B.

Part A

This section contains the following information:

  • Personal information of both the employer and the employee, including PAN and TAN (Tax Deduction and Collection Amount Number).
  • The fiscal year in which the tax is paid/deducted.
  • The individual’s employment period during the fiscal year.
  • Salary Information.
  • Date and amount of deduction.
  • Number of acknowledgements.

Part B

Form no. 16, this section provides all financial information, such as salary paid, tax owed, and tax paid. Additional information, such as the employer’s name and PAN number, are also provided. The following information is included:

  • Salary total.
  • Allowances and exemptions.
  • Gross income, which includes pay as well as other sources of income such as rent, mortgage, and so on.
  • Deductions from pay
  • After all payments and other interest amounts must be made, the amount of remuneration that is taxable.
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Types of Forms 16

Form 16 comes in two varieties:

  • Form 16A: The TDS amount deducted under this form is on the individual’s income other than salary.
  • Form 16B: On this form, the TDS amount deducted from the individual’s income is on the income from the property.

Form 16 can be downloaded from the TRACES website using the login credentials. Aside from the form 16 download, one can also obtain form 16A and complete it in order to file an income tax return.

Form 16A Components

Form 16A has the same information as form 16 and includes the following details:

  • Name and address of the deductor.
  • Name and address of the inductee.
  • PAN and TAN numbers for the deductor PAN number for the deductee.
  • The entire amount owed by the deductee.

What Is the Difference Between Form 16 And Form 16A?

While both forms 16 and 16A can be downloaded from the same sites, form 16A is a subset of form 16. They differ on a variety of parameters, including the following:

Definition: Form 16 is a TDS certificate for all salaries, whereas Form 16A is a TDS certificate for all income other than salary. 

Eligibility: Persons with a consistent and yearly income above Rs.2,50,000 are eligible for form 16, but persons with a business or who are self-employed must acquire form 16A, under which 10% of the income is deducted as TDS.

Regularity: The income tax form 16 is issued annually, but the form 16A is issued regularly.

Conclusion

In conclusion, Form 16 and Form 16A are two crucial income tax records in India, although they serve different objectives. Form 16 is sent by employers to salaried employees and gives a summary of their salary, tax deductions, and TDS (Tax Deducted at Source) details. It applies to salaried individuals and offers detailed information for completing income tax forms. Form 16A, on the other hand, is used for TDS on income other than salary, such as rent, professional fees, or commission. It is issued by deductors other than employers. Understanding the distinctions between these forms is critical for taxpayers to appropriately record their income and TDS when filing their tax returns.