Difference Between Form 16 and Form 16a

Form 16 and form 16a an essential document for tax filing income tax returns, it is issued under the Income Tax Act, 1961 in India. While Form 16 is a formal certificate that states the TDS deducted from the salaries of the employees. These are issued by the employer to salaried employees. Form 16a is deducted from the nom-salary income, such as rent payment, professional fees, commission earnings etc.

Taxation being an essential part of the growth and development in the country, requires timely payment and filing for avoiding penalties. The major components included in form 16 are PAN, TAN details, amount of TDS deducted, period of employment, etc. and in form 16a the major components that showcase are tax deducted at source, address of deductor, PAN details etc.

In this blog, we will give you an insight into the details of Form 16 and form 16a, difference between form 16 and 16a, components, usage, how to get it and file it, etc.

What is the Difference Between Form 16 and Form 16a

Form 16 is issued by an employer to salaried individuals for TDS deducted on salary under Section 192, while Form 16A is issued for TDS deducted on non-salary income like interest, rent, or professional fees under various sections (194, 194A, 194C, etc.). Form 16 is issued annually, whereas Form 16A is issued quarterly.

Let us understand the difference between From 16 and Form16a with the table below:

What is Form 16

➔ Form 16 (For Salaried Employees)

Form 16 is a certificate issued by the employers to the employees that certifies the TDS deducted from the salaried income of the employees and submitted to the government.

It helps the salaried employees to file income tax by summarizing income, deductions, and total amount of tax paid or deducted at source.

It is a legal certification that serves as a proof while filing Income Tax Returns (ITR) and can be used as evidence of tax payment in case of any discrepancies or assessments by the Income Tax Department.

➔ Contents of Form 16

Form 16 consists of the following:

Form 16 part a (TDS certificate details) stating the TDS deducted

This part contains details related to tax deducted and deposited by the employer.

• Employer Details: Name and Address of the Employer-TAN (Tax Deduction and Collection Account Number) of the Employer-PAN (Permanent Account Number) of the Employer
• Employee Details: Name and Address of the Employee-PAN of the Employee
• Employment: Period of Employment
• TDS Details-TDS deducted and deposited every quarter-Callan Details of TDS deposited

Form 16 part b (which includes salary, deductions, and tax computation details, etc.)

This part provides a detailed breakup of salary, exemptions, deductions, and tax liability.

• Salary Details: Gross Salary (Basic Pay, Allowances, Bonuses, etc.)-Exemptions under Section 10-Net taxable salary after exemptions
• Deductions (Under Chapter VI-A): Section 80C (PF, PPF, LIC, ELSS, etc.)-Section 80D (Health Insurance Premium)-Section 80E (Education Loan Interest)-Section 80G (Donations)-Other deductions applicable under Chapter VI-A
• Tax Calculation: Total Taxable Income after deductions-Tax liability as per slab rates-TDS deducted and deposited
• Exemptions, Rebate and Relief: Section 87A rebate (if applicable)-Relief under Section 89 (in case of arrears received)

➔ How to Get Form 16

You can get the form 16 by contacting your organization’s HR or employer. It is issued by the employer and serves as a proof of tax deducted at source.

➔ Importance of Form 16

There are various benefits of obtaining form 16 from the employers:

Helps in Filing Income TAX

It helps in filing tax during the tax filing as it mentions details of salaried income, exemptions applied, total deductions made etc. This facilitates the employee in knowing the amount breakup in salary paid towards taxation and also helps the income tax department in getting the detailed report of the individual after filing.

Serves as a Proof

It serves as a proof for that the TDS is deducted from the salaries of the employees and is submitted to the government. It contains details like salary income, deductions, exemptions, and TDS, making it easier to file accurate ITR.

Also, it is a proof of compliance of tax laws and that the tax deducted at source is fair, accurate and prompt as per the laws of the government.

Verification Document

Form 16 is a verification document which helps in verifying accuracy in deductions, and salary income. Also, banks, financial institutions, etc. verify form 16 to confirm the tax returns for loans, credit cards and visas.

Ease Loans Processes

The loan processes gets quicker with the submission of form 16 as it ensures payment of tax on time hence enhancing the credibility of the individual applying for loan. It serves as a proof of compliance, tax filing and accuracy in deductions hence enhancing the worth of individual.

Helps in Claiming Tax refunds

Tax refunds are the amount that is excessively deducted during the tax filing and are returned by the tax department after submission of adequate documents that shows the excessive deductions or any exempted amount that has been cut. Form 16 serves a detailed mentions of salary, deductions and exemptions that are accessed in an individuals’ salary. Hence, enabling them to serve it as a proof for filing refund after taxation.

Guidance for Future Tax Planning

The form 16 serves as a future tax planning document by helping individuals analyze their income, deductions, and tax liabilities, allowing them to make informed financial decisions, optimize tax-saving investments, and ensure better compliance in the upcoming financial years.

What is Form 16a

➔ Form 16a (For Non-salaried Income)

Form 16a tax certificate that outlines the tax deducted at source for non salaried incomes. It is issued by entities that deduct TDS while making payments to individuals or businesses other than salaries. It serves as a proof that tax deducted at source is conducted and is deposited to government on time.

It includes non slaried incomes such as:

• Rent
• Fixed deposit
• Professional fees
• Commission or Brokrage
• Contactual Payments, etc

➔ Contents of Form 16a

Form 16a includes the following contents:

• Deductor details such as PAN number, contact number, Name, etc
• Duductee details such as PAN number, contact number, Name, etc
• TDS transaction details such as amount paid, TDS deducted, nature of payment, date of deduction, etc.
• Challan details, such as date of deposit, challan number, etc.
• Verified signature of the deductor
• Date of issue of form 16a

➔ How to get Form 16a

You can get form 16a from the deductor (entity that deducts TDS).

➔ Importance of Form 16A

The importance of form 16a is sgnificant for individuals having non-salaried income because of the following:

• It serves as a proof of TDS deduction and submission to government
• Helps in claiming the TDS credit in case of excessive TDS deduction while filing income tax returns
• Ensure tax compliance for both deductor and deductee
• Helps in getting loans approved
• Helps in maintaining transparancy in TDS deduction.

How to File Form 16 and form 16a

Here is a holistic understanding of how you can file form 16 and form 16a:

How to file form 16?

To file form 16 follow the following steps:

• Collect from Form 16 from your employer
• Login to Income tax e-filing Portal by providing all the required information such as PAN number, password, captcha, etc. Register as new user if you are new to the portal and sign up.
• Download form 26AS and AIS to check if form 16 and 16a transactions and deductions, matches with what was deposited with the government.
• Choose your ITR form as per your income.
• Enter income details.
• Verify tax liability and or refund (if any). If the tax amount is excessive than the specified percentage, then you can file a return for the excess amount paid.
• Click on submit.
• After submitting e-verify via, AADHAAR OTP, Digital signature, Net banking, etc.

How to file form 16a?

Unlike form 16, Form 16a is not filed, rather it is used as a proof of tax compliance. Also, provides details of tax deducted at source (TDS) on income other than salary, such as interest, rent, or professional fees. It’s typically issued by the entity deducting the TDS to the taxpayer.

Here’s how to obtain 16a:

• Obtain it from the deductor such as bank or other.
• Verify that the details in form 16a are correct such as PAN number, details of payment, deductor’s details, etc.
• Log in to income tax portal (Create an account in case you are a new user)
• Choose your income tax form as per your income
• Enter the TDS details as in form 16a you have to fill in the TDS amount and the deductor’s details as reflected on the form.
• Ensure that TDS deducted amount in form 16a matches with form 26AS (It is a credit statement that show the total TDS deducted on your behalf)
• Submit the ITR form

Key Takeaways

In conclusion, there are certain pointers that are required to be considered and known while filing tax and getting form 16 and form 16a.

• In form 16 vs 16a, Only salaried employees are eligible for form 16 while nonsalaried or temporary workers can use form 16a for filing returns.
• Form 16a is different from form 16 part a (this is a part of form 16 that is applied for salaried employees). Whereas, form 16a is only applicable for non-salaried incomes.
• You can use Form 26AS as an alternative to form 16 and 16a (available on the Income Tax Portal) to check all TDS deductions made by employers, banks, or clients.

After getting a holistic understanding on form 16 vs 16a, it is essential to collect your form 16 and 16a from your employer or deductor for not only filing income tax returns but also for knowing the details of TDS deductions made from your income (salaried and non-salaried). Also, to comply with the government rules and regulations it is essential to keep your form 16 and 16a handy and be a responsible citizen by contributing towards the development of the country’s economy.

FAQs on Form 16 and Form 16a

1. Can I file my Income Tax Return without Form 16 or Form 16A

Yes, you can file your income tax without form 16 and form 16a by gathering other relevant document required for filing tax. You can use Form 26AS as an alternative (available on the Income Tax Portal) to check all TDS deductions made by employers, banks, or clients.

2. Are Form 16 and Form 16A the same?

No, form 16 and for 16a are not the same. Although both are related to tax deducted at source yet, form 16 is used for salaried incomes and form 16a is used for non-salaried income.

3. Is Form 16 and salary slip the same?

No, form 16 is not the same as a salary slip. Form 16 is a tax document that is related to TDS (tax deducted at source) for salaried employees and tax deposited to government. While salary slips are the detailed mentions of salary breakups, deductions, compensations and benefits. Form 16 is issued annually by employers while, salary slips are generated monthly.

4. Is it possible to have multiple Form 16A certificates in a financial year?

Yes, since form 16a is generated in cases of non-income salaries, it can be generated multiple times for varied scenarios such as, multiple income sources from rent, professional fees, etc. and from multiple deductors.

5. Is Form 16A applicable for freelancers and consultants?

Yes, Form 16A is applicable for freelancers and consultants because it is issued for TDS deducted on non-salary income.

6. Who is eligible to receive Form 16?

All the salaried employees are eligible to receive form 16 from their employers, irrespective of their salary income. However, employees with no TDS deduction from salaries are not eligible to get form 16 as it is a TDS certificate. Also, contract workers, freelancers and consultants are not eligible to receive form 16 as their salary is not enrolled in the payroll and are temporary.