Form 16A: What Every Taxpayer Should Be Aware of

Updated: Apr 23

Form 16A is crucial because it facilitates accurate tax calculation and seamless income tax return (ITR) filing. Form 16A should be sent to you by your employer regularly—either quarterly or annually. You must have a copy of this document on hand in case you need to file your taxes or have any more questions about them later on. We'll break down the intricacies of Form 16A and give you all the information you require in this article. Comprehending Form 16A is crucial for precise tax computations and effortless submission of revenue Tax Returns, regardless of whether you are an employee receiving a wage or obtaining revenue from other sources.

What is Form 16A?

Importance of Form 16A

Types of Payments Attracting TDS under Form 16A

Form 16A Format

How to Get Form 16A/TDS Certificate?

How to Download Form 16A

How to Fill Out Form 16A?

Verification of Form 16A Online

TDS Deduction rates for Various Cases in Form 16A

Differences Between Form 16, Form 16A, and Form 16B

Conclusion

Mostly Asked Questions

What is Form 16A?

A TDS certificate, or Form 16 A, is essentially what you get when you get paid for something other than your salary. For instance, rent revenue, life insurance commission, interest on fixed deposits, etc. varying income categories have varying TDS rates, and each income category has a distinct TDS threshold limit. For instance, assume you have won Rs 50,000 by playing card games, the lottery, or other sources of income. According to Section 194B, if the income is more than Rs 10,000, TDS is applied at a rate of 30%. As a result, you will receive a net amount of Rs 35,000 (50,000 – 30% of 50,000) when you receive your income. You will see this tax amount (Rs 15,000) on your Form 16A.

Importance of Form 16A

Your employer will give you a document called Form 16A, or TDS certificate, which details the amount of tax withheld from your paycheck or other sources of income. Here are a few reasons making it a significant document.

Proof of TDS Deduction: Form 16A serves as documentation that tax has been withheld at the source from the deductee's income.
Income Tax Filing: Individuals must use Form 16A in order to file their income tax returns. It facilitates the precise computation of their tax obligation.
Claiming Tax Credits: It is possible to lower one’s tax obligation by claiming tax credits for the tax withheld at source. This is made possible by the TDS certificate.
Adherence to Tax Regulations: In accordance with the Income Tax Act, employers that are deductors are required to issue Form 16A. It guarantees that employers meet their responsibilities to withhold TDS and give workers the required paperwork.
Correct Financial Record-Keeping: Form 16A, which summarises the employer's TDS deductions, aids individuals in keeping correct financial records. Transparency and accurate record-keeping are encouraged by this.

'Types of Payments Attracting TDS under Form 16A

The ITA's Section 206C lists non-salary earnings that are subject to TDS. It should be mentioned that each of these incomes is liable to a distinct rate. Generally speaking, TDS is in charge of the following:

Rent
Dividends
Interest accrued on bank accounts
Winnings from a horse race
Amount won from a lottery or crossword puzzle
Insurance commission
Payouts to a contractor
Payments for repurchasing mutual fund units
Payouts for National Savings Scheme
Payments to non-residing sportsmen or sports associations
Compensation, commission or brokerage
Income from foreign currency bonds
Income from the Indian company’s shares
Technical and professional service fee
Revenues generated from units under Section 196b
Earnings of foreign companies under Section 196a(2)

Notably, if the total amount is less than Rs. 10,000, TDS does not apply to the interest earned on the savings account. However, the account holder is required to pay TDS if the amount exceeds this cap.

Form 16A Format

Form 16A may have several formats depending on the software used by the deductor and the format required by the Income Tax Department. Nonetheless, Form 16A contains the general information listed below:

Deductor and the deductee name and address
PAN of both parties
Assessment year
Quarter for which TDS is deducted
Nature of payment
Date of payment and deduction date of TDS
TDS amount deducted and deposited
Challan number and date of TDS deposit
Unique TDS certificate number
Other relevant details as required

Form-16A

.pdf

Download PDF • 500KB

How to Get Form 16A/TDS Certificate?

The web-based application system TRACES (TDS Reconciliation, Analysis and Correction Enabling System) offers Form 16A for download. It is regarded as a legitimate TDS certificate, and you are only able to create Form 16A in the presence of a current PAN. The process to download Form 16A is as follows:

Step 1: Enter the captcha code, password, TAN, PAN, and user ID to access the official TRACES portal.

Step 2: Select Form 16A from the drop-down menu located in the "Downloads" section.

Step 3: Choose the form type, PAN, and financial year and quarter for which you wish to download the TDS certificate. Press the "Go" button.

Step 4: Check every detail that is shown in Form 16A and on the screen. Press the "Submit" button.

Step 5: KYC validation can be completed in two ways:

Using a Digital Signature Certificate: After selecting "Validate," entering the DSC password, and selecting "Sign,"
Without DSC: Enter information such as the PAN, the amount of TDS deposited, the challan details, and the token number of the IT return that was filed. Select "Proceed" from the menu.

Step 6: A request number and a success message will show up after the KYC information has been verified. After the request status is "Submitted," wait for 24 to 48 hours. When the status is "Available," Form 16A can be accessed and downloaded using the request number from the "Downloads" section.

Step 7: Choose "view all" after entering the request number or date. If the status is "Available," select "Download."

Step 8: To convert the text file to PDF, download and run the TRACES Utility. Navigate to the "Downloads" tab, select "Files Requested For Download," then "Click Here." On the following screen, enter the captcha code.

Step 9: To convert Form 16A to PDF, download the TRACES PDF converter V 1.5 light edition.

How to Download Form 16A

After filing the TDS return for non-salary payments using Form 26Q, people should download Form 16A. A deductor can get Form No. 16A by following these instructions:

Step 1: Go to the official Income Tax website.

Step 2: Enter TRACES and log in.

Step 3: Click the "Downloads" tab.

Step 4: Choose "Form 16A."

Step 5: Give the necessary information.

Step 6: Select "Go." After completing these procedures, people can download the aforementioned form and fulfil the necessary criteria.

How to Fill Out Form 16A?

After deducting tax at source (TDS) on some payments, such as interest, commission, rent, etc., the deductor issues Form 16A to the deductee. The procedures for completing Form 16A are as follows:

Step 1: Use the format supplied by the deductor's software, or download the Form 16A format from the Income Tax Department's website.

Step 2: Type in the deductor's name, address, PAN, and exclusive TDS certificate number.

Step 3: Enter the deductee's name, residence, PAN, and the assessment year for which the certificate is being issued.

Step 4: Mention the payment type, the date of payment and the date of TDS deduction, as well as the quarter for which TDS has been withheld.

Step 5: Enter the TDS amount that was taken out and deposited with the government, the challan number, and the date that the TDS was deposited.

Step 6: As needed, provide any additional pertinent information.

Step 7: Within 15 days of the deadline for submitting the TDS statement, sign, print, and give Form 16A to the deductee.

Verification of Form 16A Online

The Income Tax Department's TDS Reconciliation Analysis and Correction Enablement System (TRACES) allows taxpayers to confirm income tax 16A. By obtaining Form 26AS, individuals can obtain information about the deductions made by their employer. This can be done by inputting the employer's TAN and PAN, the certificate number, and the financial year. Generally speaking, they should contact their employer first and request that they make the necessary modifications if they see any discrepancies in the information. Among the important causes of any inconsistency in the form details are the following:

Not filing the TDS return
Giving erroneous PAN or TAN information
Omitting information about TDS payment in the TDS return
Quoting an incorrect amount
Providing an incorrect Challan Identification Number

TDS Deduction rates for Various Cases in Form 16A

TDS is deducted at different rates according to the nature of payment. The following table illustrates these rates:

Differences Between Form 16, Form 16A, and Form 16B

The following table represents the differences between these three forms:

Parameters	Form 16	Form 16A	Form 16B
Issuer	Issued by the employer	Issued by financial institutions, tenants, and other concerned entities	Issued by a property buyer to its seller
Receiver	Salaried employees	Non-salaried employees	Seller of a property
Purpose	Issued when tax is deducted at source from salary	Issued when tax is deducted at source on income other than salary	Issued when tax is deducted from income during the sale of property or any immovable assets

Conclusion

For taxpayers, Form 16A is a crucial document since it makes precise tax calculations easier and makes submitting income tax returns (ITR) easier. Form 16A must be routinely given by employers to their staff members, either quarterly or at the end of the year. A copy of this document must be retained for use in future tax queries and tax filing. Comprehending Form 16A is vital for precise tax computations and seamless ITR submission, regardless of whether you are an employee getting a wage or have additional sources of income. To guarantee adherence to tax laws, it is advised that you become familiar with the elements, creation procedure, and validation of Form 16A.

FAQ

Q1. What is Form 16A used for?

In the Indian context of income tax, Form 16A is a crucial document. It is a TDS (Tax Deducted at Source) certificate that is given to people and organisations by the deductor, which is usually the person or entity in charge of withholding TDS from payments made to third parties.

Q2. How to get Form 16A?

You can request Form 16A from any individual or organisation that has taken TDS, including banks, agencies, employers, etc.

Q3. What is the difference between Form 16 and Form 16A?

Form 16 is for people who get salary income, whereas Form 16A is also a TDS certificate. Form 16A, on the other hand, is for TDS on sources of income other than wages. Form 16A is issued on a quarterly basis, whereas Form 16 is given to the employee annually.

Q4. How many days after filing the quarterly TDS return can one download Form 16/ 16A?

Employers are required to provide Form 16/ 16A to workers within 15 days of the employees filing their fourth-quarter TDS returns.

Q5. Is it possible to file income tax returns using Form 16a without a payslip?

Yes, form 16A may be used to file the return. Payslips are unrelated to Form 16A.

Q6. Does an employee for whom TDS has never been deducted receive Form 16A?

Form 16A is not for the employees, and if TDS has not been withheld, Form 16A does not need to be submitted.

Q7. What is the penalty for not generating Form 16A?

According to section 272A of the Income Tax Act, the employer or deductor may be penalised for failing to provide or issue Form 16A. For every day when there is a delay without a valid explanation, there is a penalty of INR 100. It is noteworthy that the entire penalty, encompassing sections 200(3), 203, and 206, ought not to surpass the tax deducted at the source. This fine emphasises how important it is to provide TDS certifications accurately and on schedule.

Q8. When is Form 16A generated?

You will receive Form 16A from a bank if it deducts TDS from your rent receipts, insurance commission, or interest income from fixed deposit accounts.

Q9. When is Form 16 generated?

Employees typically receive Form 16 by June 15th of each year at the latest. Should you have changed jobs within the financial year, all of your previous employers will send you a Form 16.

Q10. What is a TDS certificate?

TDS certificates are sent to the deductee—the person from whose payment the tax is withheld—by the deductor, the entity that is withholding taxes. Form 16 (for TDS on Salary) and Form 16A (for TDS on non-salary payments) are the two forms of TDS certificates that are available.