Introduction
Let's discuss the importance of one of India's most crucial paperwork for taxes. Under section 203 of income tax deducted at source, there are three different types of forms that are filed. Form 16, Form 16A, and Form 16B, are the three different kinds of forms which is been filed.
Table of Contents
- Introduction
- What is Form 16?
- Components of Form 16
- How to download Form 16?
- Components of Form 16A
- When Form 16A is issued
- What is Form 16A?
- Process to download Form 16A
- Differences between Form 16 and Form 16A
- What are the various payment covered under Form 16A
- FAQs on Form 16 & Form 16A
- Conclusion
What is Form 16?
Form 16 is an income tax form that organizations use to tell their employees about the taxes deducted. The proof filing of income tax returns by the employer to the government is known as Form 16. If an employee exceeds the limit decided by the government then the employer needs to deduct a certain amount from the employee's salary as a form of TDS (Tax Deducted at Source). Employees can claim Form 16, from the employer.
Components of Form 16
Form 16 is a certificate which comprises of two parts:
Part A:
In this part it contains information about the employer and employee, such as names, addresses, PAN (Permanent Account Number), TAN (Tax Deduction and Collection Account Number), period of employment, and details of TDS deducted and deposited with the government.
Part B:
In this part it specifics of how much salary paid, details of other incomes, deductions allowed, tax payable, etc.
How to download Form 16?
- Visit the income tax department website
- Login to the website
- Go to the download tab
- Select Form 16
- Select the appropriate financial year for which Form 16 is needed
- Enter PAN, click on Add and click on go to proceed
- Click on submit for downloading Form 16
Components of Form 16A
Form 16A components are :
- Deductor and deductee information like PAN (Permanent Account Number), and TAN (Tax Deduction and Collection Account Number).
- Assessment year for which the certificate is issued
- Quarter for which TDS has been deducted
- Particulars of payments on which TDS has been deducted
- Details of tax amount deducted and deposited with the government
- Challan number and date of TDS deposit with the government
- Unique TDS certificate number
When Form 16A is issued
Form 16A is issued for various types of payments which have been deducted on income sources apart from salary:
What is Form 16A?
Form 16A is used for the deduction of the income other than salary. Income earned as a form of commission, Interest, mutual funds, and dividends, which are non-salary income, and are subjected to the TDS deduction.
Process to download Form 16A
- Login to TRACES - Enter details regarding PAN, TAN, and other details which is been needed
- Navigate to Form 16A - After login, go to the download option and select Form 16A.
- Select financial year and PAN - Need to select a financial year for which TDS certificate is needed. Through Bulk PAN or Search PAN deductor can request for Form 16A
- Details of Authorized person - Preview related to the profile information is generated, information will be printed out and click on submit.
- Select one of the KYC validation - There are two options related to the KYC a user needs to select one of the options.
- Success page - After completion of the KYC validation, a success page is generated, along with 2 request number that one can download from site.
- Navigate to requested download - Enter the Request Number, Request Date, or View All to see all of the requests. Choose the appropriate row. Click the download button if the status is ‘Available.'
- Download TRACES utility - Select HTTP Download from the drop-down menu. The file is downloaded as a zip file. It is not necessary to extract the file. To access requested downloads, go to Downloads > Requested Downloads. To get started, use the ‘Click here' button.
- Enter Verification code - To download utility for form 16A, click on TRACES
- Enter the zip file and open the JAR file - Enter all the details which are needed to download form 16A.
Differences between Form 16 and Form 16A
|
Form 16 |
Form 16A |
|
It is a certificate for the employee on the tax deducted on there salary. |
A TDS certificate is generated for the income earned from other sources, which is not considered a salary. |
|
This one only implicates to the salaried employee |
Applicable to any individual who has earned income from mutual funds, commission, or any other kind of income except salary. |
|
This certificate is generated by an employer for employee |
This is generated by a person or institution |
|
It is issued yearly |
It is issued annually or quarterly |
|
Employers can deduct TDS if employee salary exceeds 2,50,000 in a financial year |
TDS must be deducted from the income earned if the limit exceeds 30,000. |
What are the various payment covered under Form 16A
| Section | Nature of Payment | Threshold Limit (Rs) | TDS Rate (%) |
| 192A | Premature EPF withdrawal | 50,000 | 10% , Without a PAN number is now 20% |
| 193 | Interest on securities | 10,000 | 10% |
| 194 | Payment of any dividend | 5,000 | 10% |
| 194A | Interest other than "Interest on securities" | 40,000 50,000 (For senior citizens) | 10% |
| 194A | Interest other than "Interest on securities" u/s 193 | 5,000 | 10% |
| 194B | Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort | 10,000 | 30% |
| 194BB | Income from horse races | 10,000 | 30% |
| 194C | Payment to contractor/sub-contractor (HUF/Individuals) | Single contractor payment 30,000 Aggregate contractor payment 1,00,000 | 1% |
| 194C | Payment to contractor/sub-contractor (Others) | Single contractor payment 30,000 Aggregate contractor payment 1,00,000 | 2% |
| 194D | Insurance commission (Domestic Companies) | 15,000 | 10% |
| 194D | Insurance commission (Other than companies) | 15,000 | 5% |
| 194DA | Payment in respect of life insurance policy | 1,00,000 | 5% |
| 194E | Payment to non-resident sportsmen/sports association | NA | 20% |
| 194EE | Payment in respect of deposit under National Savings scheme | 2,500 | 10% |
| 194F | Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India | NA | 20% |
| 194G | Commission, etc., on sale of lottery tickets | 15,000 | 5% |
| 194H | Commission or brokerage | 15,000 | 5% |
| 194-I | Rent - Plant & Machinery | 2,40,000 | 2% |
| 194-I | Rent - Land or building or furniture or fitting | 2,40,000 | 10% |
| 194-IC | Payment that are made under Joint Development Agreement (JDA) to Individual/HUF | NA | 10% |
| 194J | Amount paid towards fees for technical services | 30,000 | 2% |
| 194J | Amount paid as royalty for sale/distribution/exhibition of cinematographic films | 30,000 | 2% |
| 194J | Amount paid by way of fee for professional services | 30,000 | 10% |
| 194LA | Payment of compensation on acquisition of certain immovable property | 2,50,000 | 10% |
| 194LB | Payment of interest on infrastructure bonds to Non-Resident Indians | NA | 5% |
| 194LC | Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds | NA | 5% or 4% |
| 194LD | Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor | NA | 5% |
| 194LBA | Certain income distributed by a business trust among its unit holder | NA | 10% |
| 194LBB | Investment fund paying an income to a unit holder | NA | 10% , Non Resident 30% Foreign Company 40% |
| 194LBC | Income in respect of investment made in a securitisation trust | NA | Individual - 25%or HUF - 30% , Domestic Company - 10%, NRI - 30% , Foreign Company - 40% |
| 194M | Payments by Individual/HUF not liable to deduct TDS under Section 194C, 194H, and 194J | 50,00,000 | 5% |
| 194N | Cash withdrawal exceeding a certain amount | Co-operative society - 3 Crore , Others - 1 crore | 2% |
| 194N | Cash withdrawal for those persons who have not filed ITR for three previous years immediately preceding the previous year | if exceeds Rs. 20 / if exceeds Rs. 1 crore | 2% / 5% |
| 195 | Income in respect of investment made by a Non-resident Indian Citizen | NA | 20% |
| 195 | Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen | NA | 10% |
| 195 | Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 | NA | 10% |
| 195 | Income by way of long-term capital gains as referred to in Section 112A | NA | 10% |
| 195 | Income by way of short-term capital gains referred to in Section 111A | NA | 15% |
| 195 | Any other income by way of long-term capital gains | NA | 20% |
FAQs on Form 16 & Form 16A
1. What are the benefits of Form 16 and Form 16A?
The data of TDS and income will help taxpayers at the time of filing for income tax returns and for calculating tax for the income.
2. Is it necessary for salaried personnel to complete Form 16?
Form 16 is one of the most necessary documents for salaried individuals to file their income tax returns.
3. What is the difference between Form 16 and Form 16A?
Form 16 is only used by salaried people, whereas Form 16A is used by anyone with income that isn't in the form of a salary.
4. For which period Form 16 is issued?
For every financial year Form 16 is been issued by an employer to the employee.
5. For which period Form 16A is issued?
Every quarterly Form 16A is been generated, and the due date for Form 16A is every 15th of the month.
Conclusion
At the time of tax calculation Form 16 and Form 16A is useful, it will be useful for the smoothly filing of an income tax return. With knowledge of Form 16 and Form 16A, taxpayers will be capable of understanding their importance and applying them appropriately.
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