Form 16 & the Difference Between Form 16 A & B?

Last Updated at: October 16, 2019
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form 16

Form 16 is the form certificate given by the Central Board of Direct Taxes. This format is given by the employer providing the details of the employees salary and deducted tax. The form 16 is very important document which is needed while filing the income tax returns.It is produced on the basis of financial year.

As discussed earlier, all employers must furnish their employees with the Form 16, if they deduct TDS from their salaries. Form 16 is a mandatory requirement under the tax rules of India. They need to be issued by every employer that deducts tax at source. Form 16 also works as a proof for employees (while filing their returns) that the tax was deducted at source.

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Form 16 needs to be issued at the end of each financial year, by May 31, in order to facilitate filing of tax returns by the end of July.

Let us now take a closer look at what Form 16 conveys. This form contains two parts: Form A & Form B. There is a marked difference between the two parts, since each of them carry different details and signify diverse facts. Here are the details of both the parts and how they are different.

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Form 16 Part A

Form 16 A provides the essential and basic details of the employer and the employee. It will, therefore, contain the PAN and TAN of the employer and the PAN of the employee, as well as their permanent addresses. It will also contain details of the money paid to the employee during the current financial year (the Form 16 is to be given before the end of May for the previous financial year) and the tax deducted at source. The monthly break-up is also added. Hence, if you look at Part A of the form, you will be able to identify the following:

a. The name of the employee
b. TAN and PAN of the employer
c. PAN of the employee
d. Summary of tax deducted and deposited for the quarter
e. Assessment year
f. Period of employment (of the employee with the current employer who is supplying the form 16)
g. Unique TDS certification number

The form can be downloaded from the TRACES site.

Form 16 Part B

Part B of form 16 is the Annexure and contains other essential details, apart from those mentioned in Part A. This is the part that really matters, as it adds lots of detail to what is mentioned in Part A. For instance, the Part B has the salary completely broken down, as per the salary slip.

Also mentioned, along with HRA, Basic Income, Dearness Allowance, are investments made under Section 80C.

Hence, to sum up, form 16 b consists of:

a. A detailed salary breakup
b. Investments made under Section 80C (breakup)
c. Aggregate of Section 80C deductions
d. Deductions allowed under the income tax act
e. Relief under Section 89
f. TDS (Tax Deducted at source)
g. Tax due for the financial year, or tax refund to be claimed (after calculations)

Form 16, is therefore, a crucial document for every employee. Any errors in Form 16 cannot be corrected by the employee, but a request needs to be made by the employer to provide a revised (and corrected) Form 16.

If you have worked in more than one company for that financial year, then you need to collect respective Form 16s from the employers you have worked with, and submit them separately.

When Form 16 is issued by the employers, check the details thoroughly, and compare with your own calculations before submitting it for income tax returns.

The important changes done in the form 16 are detailing of the salary and deductions in the part B, new category is allowed of deductions under the chapter VIA in the Income Tax Act, specific details should be mentioned in Chapter VIA, relief claimed should be mentioned clearly under the section 89, details should be given related to surcharge and rebate, and TDS must be mentioned properly. Therefore, keep in mind the changes in form 16 to experience hassle-free.

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