In this article we will elaborate on the differences between Form 16 and Form 16A in the context of Income Tax.
Filing income tax returns above a specified income amount is mandatory. Form 16 is of utmost significance, which acts as financial proof for the tax payment and deductions made to the government. The issue of both the forms, Form 16 and Form 16A is done under Section 203- Income Tax Act, 1961. But, before knowing how these forms are different, we must know their components and the information they cater to.
Components Of Form No.16
Form 16, in simple terms, is the TDS certificate issued for salaried individuals on the amount collected as tax by the deductor. Form 16 is further divided into two components, which include part A and part B.
Part A
The details contained in this part include the following:
- Personal details of both the employer and the employee
- PAN details, TAN (Tax Deduction and Collection Amount Number) details.
- Assessment year under which the tax is paid/deducted.
- The employment period of the individual in the financial year
- Summary of the salary
- Deduction date and amount
- Acknowledgment number
Part B
Form no. 16, this part contains all the financial details including salary paid, tax due, and tax paid. Additional details namely the employer’s name and PAN details are also mentioned. The list of details included is as follows:
- Total salary
- Exemptions and allowances
- Gross income, i.e., the total amount of salary along with other sources of income such as rent, house, etc.
- Salary deductions
- The amount of salary that is taxable after all the payments and other interest amounts that need to be paid
Form 16 – Types
Form no. 16 is of two types, namely:
- Form 16A: Under this form, the TDS amount that is deducted is on the income of the individual other than the salary.
- Form 16B: under this form, the TDS amount that is deducted from the income of the individual is on the income from the property.
The form 16 download can be done from the TRACES website using the login credentials. Apart from the form 16 download, one can also get form 16A and fill it out to file the income tax return.
Components Of Form 16A
Just like form no. 16, the details that are included in form 16A are as follows:
- Deductor’s name and address
- Decductee’s name and address
- PAN number and TAN number of the deductor
- PAN number of the deductee
- The total due amount of the deductee
Like income tax form 16, the amount paid to the income tax department is also mentioned
Your financial compass – Utilize our Salary Tax Calculator to chart a course for tax efficiency.
Difference Between Form 16 And Form 16A
Form 16 and Form 16A are crucial documents for taxpayers, significantly influencing the calculation of tax liabilities and facilitating the filing of income tax returns. Due to their similar roles, taxpayers often struggle to differentiate between them. However, understanding their distinctions is essential for optimising their utility and ensuring a seamless tax filing process.
Form 16 is issued by employers to salaried employees, detailing their salary income, tax deductions under Section 80C, and TDS (Tax Deducted at Source). It serves as a comprehensive proof of income earned and taxes paid throughout the financial year.
On the other hand, Form 16A is issued for non-salary incomes like interest income, freelance earnings, or contractual payments, where TDS is applicable. This form provides a breakdown of income and TDS deducted by entities other than employers.
To navigate tax filing effectively, taxpayers should grasp the specific purposes and contents of Form 16 and Form 16A. This understanding ensures accurate reporting of income, deductions, and taxes paid, contributing to a hassle-free compliance with tax regulations.
Similarities Between Form 16 and Form 16A
Additionally, the similarities in income tax form 16 and form 16A include:
- Both forms are under the same section, i.e., 203 of the Income Tax Act, 1961.
- Form 16 and Form 16A can be downloaded online. In addition to this, the verification of both forms can also be done online.
How Are Form 16 and Form 26AS Related?
While income tax form 16 and form 26AS might look similar, actually, Form 26AS is used for the verification of the details mentioned under form 16 and its components, along with the information regarding deductions from salary and other income sources.
26AS contains:
Part A
TDS (Tax Deducted at Source)
TCS (Tax Collected at Source)
Part B
Details of TCS (Tax Collected at Source)
Part C
Tax paid details (other than TDS & TCS)
Part D
Paid refund details
Part E
AIR transaction details
Part F
Details of Tax Deducted on sale of immovable property u/s194IA (For Buyer of property)
Part G
TDS defaults* (processing of defaults)
Conclusion
There are some minor as well as major differences between form 16 and form 16A that must be considered before the filing of the form. All individuals must check the criteria they belong to and register their financial documents accordingly.
Frequently Asked Questions
When should Form 16 be issued?
Form 16 should be issued annually by employers to their employees on or before 15 June of the assessment year following the financial year in which income was earned. This document summarises salary income, tax deductions, and TDS details, crucial for filing income tax returns.
What is the benefit of Form 16A?
Form 16A is beneficial for taxpayers receiving income other than salary, such as interest income or freelance earnings, where TDS has been deducted. It serves as proof of TDS deducted by entities like banks or clients, helping taxpayers to accurately report their income and claim tax credits.
Is Form 16A mandatory for ITR?
Form 16A is not mandatory for all taxpayers filing income tax returns (ITR). It is required only for individuals who receive non-salary income on which TDS has been deducted by the payer. Taxpayers should include Form 16A details to ensure accurate reporting of income and TDS deductions.
What is the penalty for not issuing Form 16A?
Failure to issue Form 16A can lead to penalties under Section 272A of the Income Tax Act, 1961. The penalty amount can range from ₹100 to ₹10,000 for each instance of non-compliance, depending on the duration of the delay in issuing the form.
What happens if Form 16 is not given by the employer?
If an employer fails to issue Form 16 to an employee, it signifies non-compliance with tax regulations. The employee may face difficulties in accurately reporting their income and deductions while filing income tax returns. Employers failing to provide Form 16 can be penalised under income tax laws for non-compliance and may attract scrutiny from tax authorities.
Read more,
- Learn Income Tax Returns AY 2022-23
- Filing of Income Tax Returns In India
- Guide to Understanding Professional Tax in India
