| Form 16A | |
|---|---|
| Purpose | Form 16A is issued when tax is deductible at source from non-salary sources such as interest in investment/FD, rent, etc |
| Issuer | Employer or deductor |
| Receiver | Non-salaried employees or those with earnings from non-salary sources |
Form 16A is basically a certificate for Tax Deducted at Source (TDS). It is issued by employers. The eligible payments for such TDS are over Rs. 30,000 and not tax exempted. Form 16A is a TDS proof for such payments from other sources than salary. The Form also contains details of these payments. This certificate is released every quarter usually from the 15th of a month till the due date of TDS return (quarterly). The TDS rate depends on the non-salary income type.
In this post, we will discuss Form 16A importance, components of this tax form, how to download, payments accounted for TDS, how to fill the form, and FAQs.
Here is why Form 16A is significant today:
The Form 16 A details are also available in the Form 26AS. The details in the certificate help during IT returns and filing taxes. Here are the components of the form:
You must download this form after filing the TDS return for non-salary payments through Form 26Q. Here are the steps for the download:
Under the Section 206C of the Income Tax Act, certain non-salary incomes are liable for tax. Each of these incomes are applicable to different rates. TDS does not apply on accrued interest on savings accounts, if the earned sum is lower than Rs. 10,000. If the sum exceeds this limit, then you have to pay the tax deducted at source on it.
Some of the relevant payments liable for tax deduction include:
Here are the relevant directions:
Here are the Form 16A FAQs:
| Parameters | Form 16 | Form 16A | Form 16B |
|---|---|---|---|
| Who Issues It? | Employer | Issued by tenants, financial institutions, and other relevant entities | Issued by property buyer to the seller |
| Who Receives It? | Salaried employees | Non-salaried employees | Property seller |
| What is the Purpose? | Issued when tax is deductible from salary | Issued when tax is deductible at source from non-salary sources such as interest in investment/FD, rent, and others | Issued when tax is deductible on income from property sale or sale of any other immovable asset |
| What Are the Components? | Employer’s PAN, employee’s PAN, income proof, tax amount paid by the employer on behalf of the employee, education surcharges, and payment acknowledgement | Deductor’s TAN and bank details, PAN, TDS payment receipt number, amount of tax paid | Seller’s PAN, acknowledgement number of Form 26QB, assessment year, breakup of income, relief under Section 89, deductions under ITA |
| ITA Section | Section 203 of the Income Tax Act. This is in regards with TDS on taxable income | Section 203 of the ITA in regards to taxable non-salary income | Section 194 of the ITA in regards to property selling |
In this form, there is a mention of the deductor's name, TAN, and PAN. This can be from the insurance company from which the TDS applies. Or, it can be from the bank where the TDS is deducted. Otherwise, it can be any other place/person you receive the earnings from, on which tax applies.
Also, the form includes the deductee's PAN and name along with the details of those who receive the TDS benefits. Then there is inclusion of payment information such as nature of payment, the amount, and payment date. Lastly, there is the receipt number of the TDS payment.
Both these forms have the same details about the deposited and deducted tax amount. Also, they contain useful information about tax credit. However, information of TDS in Form 16A may not always cover all the taxable income (non-salary ones). In this case, the outstanding tax amount may be more. So, the amount of tax payable in returns will be more as compared to that declared in Form 16A. Thus, it is important to fill up the form correctly and submit the same on time.
