Criteria
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Form 16
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Form 16A
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Definition
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Certificate for tax deducted at source from salary
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Certificate for tax deducted at source from other than salary
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Eligibility
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People earning regular income
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Business professional or self-employed
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Application
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Dividends, interest on securities, etc.
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Rent, commission, special charges, etc.
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Online Verification
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Can be done online
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Can be done online
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As a tax-paying individual, you know that TDS on salaries is deducted at the average rate on the estimated income computed according to the Income Tax Slab Rates. TDS on the rest of the incomes, like TDS on interest, TDS on rent, etc., are deducted at the chargeable rates as specified by the Indian Government. The number of TDS so deducted and deposited on all other payments except the salary earned by an individual falls under Form 16A.
Both Form 16 and Form 16A hold paramount importance when filing the tax returns begins. Though both these forms have several similarities, they also include differences that need to be understood to file accurate tax returns.
Both forms include the documents that income-earning individuals use as part of the process of filing an Income Tax Return in India. The Income Tax Act, 1961 and the Income Tax Rules of 1962 are the governing laws of the Income Tax Department of India.
Read on to comprehend the differences between both these forms.
Form 16
Form 16 is a deduction certificate for TDS certification on your salary. Certain considerations under this form include:
- If your income from salary for the current financial year is more than the basic exemption limit of ₹2,50,000, your employer must deduct TDS on your salary and deposit it with the Government by the rules of the Income Tax Act.
- If you have also disclosed your total income from other heads to your employer, they must also be considered under the total income for TDS deduction.
- If your income falls below the basic exemption limit, your employer is bound not to deduct any TDS and thus does not have to issue Form 16.
- If more than one employer has employed you during the current financial year, you must have more than one Form 16.
This certificate for TDS claims is for the employer to certify details pertaining to the salary you have earned during the assessment year and how much TDS has been deducted. It has two parts that are A and B.
Form 16A
Form 16 vs. Form 16A is a commonly asked question for taxpayers across the country. In simple terms, Form 16 is for TDS certifications, and Form 16A is only a part of the former. Form 16A is also a TDS deduction certificate. While Form 16 is related to the tax on salary income only, Form 16A is applicable for TDS on the income gained other than that of salary.
Form 16A shall be issued to an individual when a bank deducts TDS on their interest income from fixed deposits and other sources like TDS deducted on insurance commission, for TDS deducted on your rent receipts, etc. When the TDS is deducted on any other income you earn, it is eligible for TDS claims.
Details of Form 16 that are available under Form 26AS will only be TDS deducted by the employer. Understanding these forms is important and beneficial in filing your income tax return smoothly and effortlessly. With e-portals available, you can now verify the income details and how much TDS has been deducted and at what rates, even at the convenience of your home.
