Form 16A is a crucial document that helps taxpayers calculate and pay the required taxes easily. In this article, we will cover what is Form 16A, importance of Form 16A, its components, payments that are accounted for TDS, and how to fill the form among others.

What Is Form 16A?

Form 16A is a certificate for TDS that is issued by the employer. According to the IT Act of 1961, any payment over ₹2.5 Lakhs that is not entitled to tax exemptions is accounted for TDS. Form 16A is a proof for TDS of payments from income sources other than salary. This form also contains information of such payments. Form 16A is released quarterly usually on the 15th of every month till the TDS return due date. TDS rate applicable depends on the income type other than salary.

Form 16A Format

Form 16A contains details such as:

  • Name, TAN and PAN of the employer

  • Name, TAN and PAN of the employee

  • Details of payment 

  • TDS payment number

  • Deposit date and tax amount deposited

Types of Payments That Attract TDS Under Form 16A

Under Section 206C of the IT Act, some non-salary incomes are accounted for TDS. Every income source is applicable to different tax rates. TDS will not apply on accumulated interest on savings accounts, in case the sum earned is lesser than ₹10,000. In case the sum goes above this limit, you have to pay TDS on it.

 

Some relevant payments that are liable for tax deductions are:

  • Insurance commission

  • Interest from fixed deposit 

  • Interest from bank account 

  • Payment for repurchase of mutual funds

  • Technical or professional service fee

  • Contractor payouts

  • Securities

  • Winnings from lottery, horse race and crossword puzzles

  • Rent receipts

  • Commission, compensation or brokerage

  • Payouts to sports association or non-resident sportsperson

  • Revenue from unit as given in Section 196B

  • National Savings Scheme payout

  • Foreign company earnings according to Section 196A(2)

  • Income from company shares in India and foreign currency bonds

Purpose of Form 16A

Form 16A is issued when TDS is applied on non-salary sources like interest from fixed deposits, investment, rent, etc. In simple words, it is basically a TDS certificate issued by employers for deducting TDS.

Significance of Form 16A

Form 16A is important in the following ways:

  • It is essential when an individual has an additional income source other than regular salary. The deductor or employer issues Form 16A to such individuals in the current fiscal year.

  • Banks or NBFCs require them to complete the process of verification before they provide financial products and services such as personal loans.

  • It also provides information useful for income tax returns and tax filing.

  • It assists in supporting loan applications and boosts the eligibility of the applicant for the same.

  • It serves as an authorised income proof. It helps track the TDS amount that is paid on other earnings.

When Is Form 16A Required?

Now that we know what Form 16A is and how it helps, it is equally important to know when it is required. When you file ITR, total tax will be computed based on your total income. In case you do not claim tax deducted at source mentioned in the Form 26AS or Form 16A then you might end up paying tax twice on the income for which TDS was already deducted. Hence, Form 16A acts as a proof that taxes have already been paid and this form should be kept while filing your income tax return.

How to Fill in the Form 16A?

The directions to fill Form 16A is as follows:

  • Step 1:Provide the employer’s name, address and PIN number.

  • Step 2:Provide the employer’s TAN. This is an alphanumeric code. The first 4 digits are alphabets, followed by 5 digits and the last digit is an alphabet.

  • Step 3:Fill in the employer’s PAN which is also an alphanumeric code.

  • Step 4:Choose the payment type.

  • Step 5:Enter the codes pertaining to the payment.

  • Step 6:Enter the employee’s name. Enter the PAN number of the employee in the respective column.

  • Step 7:Provide the current financial year.

  • Step 8:Provide the TDS deduction amount.

How to Download Form 16A?

You have to download Form no. 16A after filing TDS returns for non-salary payments via Form 26Q. The steps to download are as follows:

  • Step 1:Visit the official website of the Income Tax department.

  • Step 2:Login to TRACES

  • Step 3:Visit the “Downloads” tab

  • Step 4:Click on “Form 16A” and enter the necessary information

  • Step 5:Click on “Go” 

 

In order to get this form, you can download it from the online website of the IT department. This form is available in a PDF format online. Most of the information that is present in Form 16A is available in 26AS as well. Yet, the purpose of both the forms are different. Form 26As is used to file income tax returns.

Frequently Asked Questions

How can I get Form 16A?

You can get Form 16A from the person/agency like banks, contractors, financial institutions, agencies, etc that deducted your TDS.

Will Form 16A be given to an employee from whom tax has never been deducted at source?

No, Form 16A is required only when TDS has been deducted.

Can ITR be filed using Form 16A without any payslip?

Yes, ITRs can be filed using Form 16A. There is no relationship between salary payslips and Form 16A.

How do I verify Form 16A’s authenticity online?

You can verify it using Form 26As as it has details about all the taxes that have been paid by you indirectly as well as directly.

What are similarities between Form 26AS and Form 16?

Both of these forms have similar details such as deducted and deposited tax amount. They also contain useful information pertaining to tax credit. That being said, TDS information in Form 16A might not cover all taxable income always. In such a case, the tax amount outstanding might be more. Therefore, the tax payable in returns will be higher when compared to that which was declared in Form 16A. So, it is crucial to fill both the forms correctly and submit on time.

What is the difference between Form 16 and 16A?

Form 16A is used for TDS for non-salaried income whereas Form 16 is used by salaried employees.

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