Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Issuance of Form 16A instead of Form 16

Ravi Dasija (C.A. ) (273 Points)

16 June 2011

Hello Friends/Seniors,

One of my friend is working in a Pvt Ltd co. He is employed there on a monthly salary basis just as it is there in case of an employee, but however his co. has issued him a form 16A instead of form 16.

My question are as under:

1) Under what head the income received will be taxable

2) If business & Profession then can he take it to be a no accounts case and file ITR 4S

3) Can we show this income chargeable under the head "other sources"

Kindly reply at earliest.

Thanks in advance.

Warm Regards

Ravi Dasija

Reply
Follow
Share

14 Replies

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 16 June 2011

Is your friend an employee or a consultant in the entity ? as 16A is issued tds has been made under 194J. so your friend needs to show income under Income from profession, which has suffered 10% deduction.

You cannot disclose as other sources.

thanks

Upgrade to CAclubindia Pro. Subscribe Now!

swapna (student) (77 Points)
Replied 16 June 2011

u could not file the return as profession

as per meaning of profession ur friend not included in profession

so u can file the return as business, no need to file u/s. 44AD its a aptional to all even any business assessee file the retun, there is some conditions in that.

so file under business not a profession

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 16 June 2011

Originally posted by : Dipjyoti Majumdar
	Is your friend an employee or a consultant in the entity ? as 16A is issued tds has been made under 194J. so your friend needs to show income under Income from profession, which has suffered 10% deduction. You cannot disclose as other sources. thanks

agreed

Ravi Dasija (C.A. ) (273 Points)
Replied 17 June 2011

He was appointed as an employee only, even i was suprised to see a form 16A instead of 16 and now the co is not issuing a fresh form 16 so he ahs to file his return as per form 16A only.

@ swapna: why do u say that there is no need to file the return u/s 44AD. Can you please explain in detail....

swapna (student) (77 Points)
Replied 17 June 2011

194J applicable to professionals but an employee doesn't included in professional.

16A issued to persons who are engaged in other business like as LIC agent, contractors, interest received from banks etc.,

but in this case ur friend may file the return under the head income from othersources

Sec.44AD is aptional specified in features.

Upgrade to CAclubindia Pro. Subscribe Now!

CA Mohit Saxena (FINANCE MANAGER) (343 Points)
Replied 17 June 2011

as u said he is hired as an employee by the company, so in this way

company also deducting PF, ESI for him also. So he is employee in that sense

How can us ay that if company makes a mistake in issuing TDS certificate then u also change the head of your income this is not as per law.

If relationship is of "Employer-Employee" then income will be charged to tax in the head Salary.

I advised you to pls check the section under which TDS has been deducted and the rate as well.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 17 June 2011

Originally posted by : Ravi Dasija
	He was appointed as an employee only, even i was suprised to see a form 16A instead of 16 and now the co is not issuing a fresh form 16 so he ahs to file his return as per form 16A only. @ swapna: why do u say that there is no need to file the return u/s 44AD. Can you please explain in detail....

check his / her payment slips, and then repost the query,

to get an employee minimum contribution of profession tax ( where ESI/PF rules are not applicable) is deducted fromn his monthly "salary".

CA,CMA,CS Karan Gogia (Employed) (230 Points)
Replied 17 June 2011

same problem occured with my brother...practically company doesn't consider some people they hire as employee rather they consider them as professional and deduct their TDS accordingly...one eg of such service is people hired for collection...

wat i did was, i filed his return showing income from bussiness and profession.....and it is appropriate as well...as for doing any profession(in come tax act) u dont need nay professional degree...moreover vocation is also considered as profession......

yes u need to file ITR4...

and u can not show it under other sources...

and please let me knw..that wat type of work ur frd is doing for co.?????

CA,CMA,CS Karan Gogia (Employed) (230 Points)
Replied 18 June 2011

hi all...

this 44AD is applicable to construction contracts ...y r u discussing it here....

Saurabh Mittal (CA Final Ambala Cantt) (39 Points)
Replied 18 June 2011

you must have obtained form 16 instead of form 16a from the company

firstly you check the status in NSDL in which company deduct the tax on the following amounts:

1. on salary

2. on other than salary

if company deduct the tax on salary than you file the return of income with ITR 1 without enclosing the form 16A with the Return.

if company deduct the tax on other than salary than you file the return with ITR 4 without enclosing the form 16 A attached witht the return.

Sec. 44 AD not applicable here.

the income may be taxable under the head other source or business and profession it depends on the nature of income

Saurabh Mittal

Ambala Cantt

Upgrade to CAclubindia Pro. Subscribe Now!

arabinda (n.a.) (52 Points)
Replied 18 June 2011

Originally posted by : Ravi Dasija

Hello Friends/Seniors,

One of my friend is working in a Pvt Ltd co. He is employed there on a monthly salary basis just as it is there in case of an employee, but however his co. has issued him a form 16A instead of form 16.

see 16a is issued for the details showing deductions made from salary during the year commonly known as tds , 16a is the tds certificate , 16 is the salary certificate . dont get confused and ask for form 16

My question are as under:

1) Under what head the income received will be taxable

2) If business & Profession then can he take it to be a no accounts case and file ITR 4S

3) Can we show this income chargeable under the head "other sources"

Kindly reply at earliest.

Thanks in advance.

Warm Regards

Ravi Dasija