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23 Oct 2019
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Income tax filing is one of the most crucial financial tasks. Since it is an exercise undertaken each year, it is helpful to have a working knowledge of the forms and terms. One such key forms is the Form 16A.  Form 16/ 16A is the certificate of deduction of income tax at source and issued on deduction of tax by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between deductor and deductee. 

As an employee, you will receive Form 16 as the certification of tax deducted by the organisation or employer from the salary income on your behalf and deposited with the income tax department. It serves as a duly verified attestation by the employer that they have deducted the income tax as TDS from your salary.

Details in Form 16/16A

Usually, this form contains the following information:

  • Name and address of the employer
  • PAN (Permanent Account Number) and TAN of employer
  • PAN of the employee
  • The Assessment Year (AY)
  • The assessment time period for which the individual was employed with the employer in the concerned Financial Year
  • Summary of the amount paid or credited, and tax deducted at source as mentioned in respect of the employee
  • Date of income tex deduction from the salary
  • Date of tax deposition in the government’s account
  • Acknowledgement Number of the TDS Payment
  • Details of tax deducted and deposited in the central government account through book adjustment and through challan

In a similar way, Form 16A performs the same function but for TDS on Income Other than Salary. Banks issue a Form 16A when TDS is deducted by them on interest earned by you in fixed deposits. Similarly, if you are a freelancer, your client will also issue you form 16A if they’ve made TDS deductions on the professional fees or payments made to you. Form 16A is also issued for TDS deductions on insurance commission paid. This certificate also has details of name & address of deductor/deductee, PAN/TAN details, and details of TDS deducted & deposited, almost the same format as Form 16. The income on which TDS is deducted is also specified.

This year, the format of Form 16A has been slightly revised by the Central Board of Direct Taxes (CBDT). The structure of Form 16 largely remains the same, which means that the information is contained in two Parts, part A and Part B. The only difference is that this year such information is much more detailed and extensive as compared to the years before.

This Form 16 has to be downloaded by your employer or client from the income tax department's TRACES website only. This means that both parts of the form will be standardised for all employees. TRACES stands for TDS Reconciliation Analysis and Correction Enabling System. It is a website where a PAN holder can view the amount of income tax that has been deducted and deposited against his/her PAN during a financial year. 

Purpose and significance of Form 16A

In the process of Income Tax filing, you will notice that all the details that are there in Form 16A are available on Form 26AS. This can be used to file your return. Before you start filing your ITR, it is important to cross-check and verify the information available in Form 16 with your salary slips and Form 26AS. In case there is any discrepancy in the information available, then you must bring it your employer's or client’s notice immediately and ask them to provide you with a revised Form 16 with the correct information. This is imperative to help you file your return smoothly.

Remember, that all salaried employees are eligible to get a Form 16 from their employers. If your employer deducts TDS from salary, it is mandatory for him to issue your Form 16 to the employee as it is a TDS certificate which certifies that the TDS is deposited to Government. The same goes for agencies, clients and other deductors who deduct your TDS. Such parties should issue Form 16 prior to the due date of May 31 of every financial year. They may even choose to furnish it on a quarterly basis.

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