TDS Certificate – Form 16 / Form 16A
A brief overview of Form 16
This post will discuss the TDS certificate Form 16 and Form 16A and their components.
We will look into the following topics:
What is a TDS certificate?
Section 203 of the Income Tax Act of 1961 requires all deductors/employers to deduct TDS from any income before payment. After deducting the TDS, the deductor must give appropriate certificates for such deductions. This certificate is known as a TDS certificate.
On deduction of TDS, it is essential to issue a TDS certificate. This certificate will let the payee know how much tax they have paid. It indicates the payment details, the date of tax deducted at the source, and the date of credit to the government.
Important Points to Know
- TDS certificate is generated by the deductor only from theTRACES portal.
- Make sure the Deductee checks the digital signature certificate.
- Look at all the details on the TDS certificate, like the name, PAN, deductors’ TAN, amount paid, and TDS amount, to ensure they are right.
The Deductee should provide the certificate details while doing regular Income Tax checks. It will help the deductee to adjust the TDS amount against the tax payable.
Because many deductors will give the TDS certificate only on request, it’s essential to ask for it. This way, the Deductee will know how much tax was paid and deposited with the government.
Types of TDS Certificates
There are two types of TDS certificates:
- Annual TDS certificate Form 16
- Quarter TDS certificate Form 16A
Form 16
If tax has been deducted at source from the salary paid to you, your employer will certify the details of tax deducted at source (TDS) and deposited by them in Form 16. Form 16 is the Salary TDS Certificate.
If your total income per annum is Rs 2,50,000 or less, the employer does not have to deduct TDS; therefore, a Form 16 may not be issued to you by the employer.
If you have worked with more than one employer during the year, you will have more than one Form 16.
Eligibility for Form 16
Form 16 is often issued to individuals who earn a salary and are in the taxable income category. In other words, if you are a salaried employee whose income is subject to tax deductions at source (TDS), you should obtain Form 16 from your company.
This form acts as a certificate of the TDS deducted from your salary and a summary of your income, deductions, and taxes paid, making it a necessary document for preparing your income tax return.
Component of Form 16
Form 16 is divided into two independent parts: part A and part B. The two parts are discussed in depth below:
Part A
The key components of Part A of Form 16 include the following details:
- Details about the employer and employee include their names, addresses, PAN, and TAN numbers.
- The Assessment Year, abbreviated as AY. It refers to the fiscal year in which the income is assessed.
- The period of employment during the fiscal year.
- Salary summary.
- Summary of tax amounts deducted and deposited with the IT department.
- Date of tax deduction.
- Date of tax deposit.
- Bank’s BSR code.
- Challan numeral.
- The acknowledgement number for the TDS return filing.
Part B
The components of Form 16 – Part B are mentioned below.
- Detailed salary breakdown.
- Detailed breakdown of exempted allowances under Section 10.
- Deductions allowed under the Income Tax Act (under Chapter VIA)
- Specific fields are alerted for the deductions listed below:
- Deduction for life insurance premiums, PPF contributions, and other expenses under Section 80C
- Deduction for contributions made to pension funds under Section 80CCC.
- Deduction for employee contributions to pension schemes under Section 80CCD(1)
- Deduction for taxpayers’ self-contribution to a notified pension program under Section 80CCD(1B).
- Deduction for employer contributions to a pension program under Section 80CCD.(2)
- Deduction for health insurance premiums paid under Section 80D
- Deduction for interest paid on higher education loans under Section 80E
- Deduction for donations under Section 80G.
- Deduction for Interest.
- Relief under Section 89 (if any).
- Tax Computation
Differences Between Form 16 vs. Form 16A
People sometimes mix up Form 16 and Form 16A. Here’s a table that shows the main differences between them.
Type of Form | Form 16 | Form 16A |
The purpose of the issue | It is used for TDS on salaries. | It is issued for TDS on any earnings made outside of salary income, such as fees, investment or commission, rent, etc. |
Issuer | The employer provides form 16. | Income Payers like company, Tenants, financial institutions, and others issue forms 16A. |
With that, we have ended this post on TDS certificate Form 16 and Form 16A. Share your queries and opinions with us in the comment section below.
FAQ
1. How can I get Form 16?
Ans: You can obtain your Form 16 from your employer. Even if you’ve left your work, your company will provide you with Form 16. Unfortunately, the Form 16 cannot be downloaded from any other source.
2. If no TDS is deducted, will Form 16 be provided?
Ans: Form 16 will be provided if any Tax is deducted. If the employee was under the taxable category, but after computation, there is no tax deduction, in such case also, Form 16 has to be provided.
3. Who is qualified to receive Form 16?
Ans: Salaried individuals who have an annual income above Rs 2,50,000 will receive Form 16.
4. Can I provide Form 16 to my new employer?
Ans: Yes, you can provide Form 16 to your new employer.
5. Are the salary slip and Form 16 the same?
Ans: No, the wage slip and Form 16 are different.
