Form 16A is a vital document that helps taxpayers compute their taxes and enables them to pay the applicable taxes. It makes it easier for the taxpayers to do that, which is why you need to have in-depth knowledge about the Form 16A.
Here in this guide, we will discuss what is Form 16A, the Significance of Form 16A, Which Types of Payments Under Form 16A Attract TDS, and much more.
Table of Contents
What is Form 16A?
Form 16A or TDS Certificate is a very important certificate that is issued by financial institutions, entities, or any people from where you’ve had any business dealing that generated income.
As per the Income Tax Act, 1961, any income other than salary which is over Rs.30,000/- is liable to TDS unless it is exempted or you do not fall in the Income-tax Slab.
Form 16A acts as proof that TDS has been paid at income source and provides details about them briefly. It is also required to be submitted when you are filing for Income Tax Returns.
A good example of Form 16A is the income which is received with TDS is interest on fixed deposits, insurance commissions, rent receipts, securities, etc.
The rate of TDS varies from income to income meaning, every income-generating tool like an FD account, bonds, etc. comes with different TDS rates.
The due date of the TDS certificate is the 15th of the month is issued in every quarter and is followed by the due date for quarterly TDS returns.
Significance of Form 16A
Form 16A is a very important certificate that is required as proof of the payment of the eligible tax at the source. But that’s not the only significance, it is essential for the following reasons as well-
Tax Filing
While tax filing, the information mentioned on the Form 16A is essential for accurate calculation of the taxes. This document helps the individuals in reporting his/her income correctly to the tax authorities as it also includes income from non-salary sources.
Income Tax Returns (ITR)
The data present in Form 16A is required while filing the ITR as it accurately reports the total income of the individual and ensures that there is tax compliance.
TDS Tracking
Keeping track of your TDS is essential to paying taxes fully as well as not overpaying. Form 16A provides a summary of all the TDS deducted from the non-salary earnings.
Proof of Income
Form 16A serves as an authorized proof of income, showcasing the individual’s earnings from other sources. It can also be used for loan applications, banking, and other financial institution’s purposes as proof of income.
What Types of Payments Under Form 16A Attract TDS?
The following are included under the purview of TDS –
- Dividends
- Rent
- Interest accrued on bank accounts
- Winnings from a lottery or crossword puzzles
- Winnings from a horse race
- Payouts toward a contractor
- Insurance commission
- Payouts for National Savings Scheme
- Payouts to non-residing sportsmen or sports association
- Payments for repurchasing mutual fund units
- Compensation, commission, or brokerage
- Income from the Indian company’s shares
- Income from foreign currency bonds
- Technical and professional service fee
- Earnings of foreign companies mentioned under Section 196a(2)
- Revenues generated from units mentioned under Section 196b
How to Fill in Form 16A?
To fill out Form 16A, you can follow these steps-
- Start by filling in the name of the Deductor followed by the address along with Pincode and Deducato’s TAN Number which is an alphanumeric number
- You’ll also need to enter the Deductor’s PAN card Number followed by entering the four-digit acknowledgment numbers
- Then mention the Form of remuneration is next, whether contractual, professional, or otherwise
- Enter the codes of the corresponding payment which are listed along with the name of the deductee whose TDS was deducted
- Now, mention the PAN Number of the deductee in the PAN no field of the form followed by entering the fiscal year period for which Form 16A is being created
- At last, you’ll need to enter the TDS tax deduction information followed by entering the TDS amount stated in words
Documents Needed to Fill Form 16A
The following are the documents required to fill out Form 16A-
- Deductor’s name, PAN, and TAN
- Deductee’s name and PAN
- Payment details
- TDS challan number
- Date of deposit
- TDS amount deposited
How to Download Form 16A?
After filling the Form 26Q, you can download Form 16A. Form 26Q is for the TDS deduction for non-salary payments. The following are the steps that you’ll have to follow to download the Form 16A-
- Visit the official website of the Income Tax Department and login to the TRACES using your login credentials
- After logging in, navigate to the Download tab and Select Form 16A
- Enter the details in the required field followed by clicking on the go button
- After clicking on the button, your Form 16A will be easily downloaded
How to Verify Form 16A Online?
Verification of Form 16A is important to ensure that there are no discrepancies in your Tax filing. Taxpayers can verify Form 16A using the TRACES system provided by the Income Tax Department.
TRACES stands for TDS Reconciliation Analysis and Correction Enablement System. This system will showcase all the deductions made and other details as well.
If there is any discrepancy in details, you can contact the employer, financial institution, or person regarding the mismatch of the information and can make the required changes.
Difference Between Form 16, Form 16A and Form 16B
The following are the differences between From 16, 16A and 16b-
| Parameters | Form 16 | Form 16A | Form 16b |
| Eligibility | An individual who earns income via salary | Individuals who earn income via self-employed or profession | Individuals who had purchased an immovable property |
| Issuer | Employer | Financial Institutions, banks, etc. | Property Seller |
| Issued Against | Salarid | Non-salaried | Sales of immovable Property |
| Frequency | Annual | Quarterly | On sale of the property only |
| Applies to | Dividends, interest on securities, etc. | Rent, professional charges, commission agents, hired machinery, etc | Sales of immovable Property |
| Law | Section 203 of the Income Tax Act | Section 203 of the Income Tax Act | Section 194-IA of the Income Tax Act |
FAQ
You can obtain your Form 16A by contacting the agency, financial institution, person, etc. Whoever deducted your TDS can provide you with the form 16A.
Yes, you can file your Form 16A without your payslips as Form 16A only considers the income generated from other sources as a base for generating Form 16A.
Form 16A does not need to be provided to an employee if the TDS is not been given to the employee.
You are required to file for TDS returns in every quarter, specifically the 15th of the month as the last date. The quarterly divisions of a financial year are April to June, July to September, October to December, and January to March. You’ll have to file for TDS returns on the official website of the Income Tax Department on the 15th date of the beginning month of the quarter.
I’m Shiv Kumar, a graduate with a passion for finance, marketing, and technology. My journey into finance started with a desire to understand money management and investing.
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