The income tax Act, 1961 with the Income Tax Rules 1962 govern the laws of Income Tax Departments in India. There are two documents considered mandatory while TDS is taken into consideration. The salaried people use both the forms 16 as well as 16A as a part of income tax return filing process in the country. They are the proof of TDS applied on the employees’ earnings by the employers. This is applicable on different incomes such as winning from horse race, puzzles, winning a lottery, etc. So, why do the two separate forms exist with their own importance? Let us find out their difference to answer this question:
Form 16 is a document applicable under Section 203 of Income Tax Act for tax deductions applicable under incomes chargeable within salaries. Form 16 A, on the other hand, is a document under the same section 203 or Income Tax Act for tax deductions on income other than salary.
Anyone who earns regular form salary requires the Form 16. Any self-employed professional with a degree qualification document requires Form 16A.
The Form 16 is applicable on incomes such as interest on securities, other deposits, dividends, etc. The Form 16A shall apply to professional charges, plant and machinery hired, commission, commission agents, rent, etc.
Form 16 comprises of proof of income, PAN and TAN of the employer, income tax payment details paid by the employee for the employee, PAN of the employee, acknowledgement of the tax paid, surcharges and education cess, etc. The Form 16A comprises of Name and PAN of the employees, PAN and TAN of the employer, payment made and nature of payment, TDS payment receipt number, etc.
However, both the forms 16 and 16A can be verified online.