As a taxpayer, it is important to understand the distinction between Form 16 and Form 16A. Many taxpayers get confused between the same. Form 16 is usually issued to the employees, while Form 16A is a certificate of tax deducted at source. Both forms 16 and 16A play a very important role in determining the tax amount payable. They also play a key role in filing the returns on income. To experience a smooth and seamless tax filing experience, it becomes important to understand the difference between Form 16 and Form 16A. Before getting into the difference, let us first understand the definition of Form 16 and Form 16A.
Form 16 is a certificate that is issued as per Section 203 of the income tax act. In the case of salaried employees, it is issued by the employer to the employee for filing returns of income. Form 16 comprises information regarding salary details and tax deductions of a particular employee. It also contains details about the tax deducted at source by the employer including the salary breakup.
As per the provisions of the Income tax act, an employer is mandatorily required to issue Form 16 to the employee. The employer needs to issue the form on or before the 15th of June of the next financial year. E.g.: if the tax is deducted on 20-21, then the form should be filed on or before 15th June 2021. The tax is deducted by the employer and is deposited monthly. However, form 16 is issued by the employer to the employee at the end of the financial year which reflects the entire salary breakup, tax exemptions, etc.
Form 16 has two parts
consists of basic information about the employer and the employee such as PAN, TAN, address, financial year, assessment year, tax deducted at source, etc
consists of information relating to income earned during the financial year, tax exemptions, salary, net tax payable, etc.
Some of the important details from Form 16 include
1. Details like Name, address, PAN, TAN of the employer
2. Details like Name, address, PAN, and TAN of the employee
3. Gross salary, perquisites, exemptions, and allowances.
4. Total tax payable by the employee
5. Total TDS deducted and collected
6. Other income earned by the employee, income from the previous employer.
According to the provisions of the income tax act, a person can earn income through two categories, either via salary or income other than salary. Form 16A is a tax deduction certificate issued for income earned through other sources. Form 16A contains details such as the name, address, PAN TAN, etc. of the deductor and the deductee. It also includes the challan details of the tax deposited along with the total income earned and tax deposited. Form 26AS can also serve as a substitute that contains the same details as Form 16A.
1. Name of the tax deductor, PAN, TAN
2. Name of the tax deductee, PAN, TAN
3. TDS payment details
4. TDS challan number
5. Date of deposit along with tax amount
For smooth and seamless filing of return of income, it is important to understand Form 16 and Form 16A. It is also important to understand the difference between Form 16 and Form 16A.
Though both forms contain pretty much the same details regarding tax deducted at the source and income on which tax was deducted from the source. Some differences should be considered for efficient fillings of return on income.
Form 16: is a TDS certificate issued by the employer to the employee revealing details regarding tax deducted at source along with salary income
Form 16A: is a TDS certificate that reflects the tax deducted at source from income other than salary.
Form 16: There must be an employer-employee relationship between the taxpayers. The employer must be paying the salary to the employee
Form 16A: An employer-employee relationship is not mandatory. Form 16A applies even to self-employed professionals
Form 16: must be issued on or before 15th June of the next financial year. However, Form 16 is issued annually
Form 16A: is issued quarterly
Form 16: is issued to an employee.
Form 16A: is issued to persons earning income from sources other than salaries.
Form 16: applies to dividends, interest on securities, etc.
Form 16A: is applicable to rent, commission, hired machinery, professional charges, etc.
Form 16: It can be verified on the online portal
Form 16A: It can be verified on the online portal
Hence, both Form 16 and Form 16A are essential for taxpayers.
Form 16A is issued quarterly. The due date for issuing form 16A is the 15th of the month following the due date of the quarterly TDS return.
Form 16 is issued by the employer on an annual basis.
You can use the income and TDS data on forms 16 and 16A to file your income tax return and calculate and pay your tax.
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