What is Form 16A? - How to Get and Fill Form 16A?

What is Form 16A?

Form 16 A is basically a TDS certificate that is issued when you receive income other than your salary, e.g., interest on fixed deposits, life insurance commission, rent income, etc. There are different rates of TDS for different types of income, and each income has a different threshold limit for TDS.

Suppose, say you have earned an income from playing the lottery, card games, etc Rs 50,000. As per Sec 194B, such income attracts TDS @ 30% if the income exceeds Rs 10,000. Hence, when you receive the income, a net of Rs 35,000 (50,000 – 30% of 50,000) will be given to you. This amount of tax (Rs 15,000) will be reflected in your Form 16A.

Significance of Form 16A

Form 16A is an important document for individuals and entities whose income is subject to tax deducted at source (TDS) on income other than salary. The form is issued by the deductor (the person or organization that deducts the TDS) to the deductee (the person or entity from whom TDS is deducted). Form 16A serves as a certificate that verifies the amount of TDS deducted and remitted to the government on the deductee's behalf.

The form serves multiple purposes:

1. Proof of TDS: Form 16A acts as proof that TDS has been deducted from the deductee's income and paid to the tax authorities. This is important for maintaining accurate financial records and ensuring proper tax compliance.
2. Tax Liability Reduction: The TDS amount indicated in Form 16A can be claimed as a tax credit when the deductee files their income tax return. This reduces the deductee's overall tax liability.
3. Income Documentation: Form 16A provides a record of income from sources other than salary, such as interest, rent, or professional fees, for which TDS has been deducted.
4. Cross-Verification: When filing an income tax return, the deductee can use Form 16A to cross-verify the TDS information provided by the deductor. This helps ensure accuracy in reporting income and tax withheld.
5. Record Keeping: Form 16A is an important document to keep on file as it may be required for future reference during audits or other financial assessments.

When filing an income tax return, the deductee should use Form 16A to claim the TDS that has been deducted. The TDS amount will be credited against the tax liability, reducing the amount of tax owed. File Income Tax Return Here.

What is the Difference Between Form 16 and Form 16A?

Both Form 16 & 16A are TDS certificates but Form 16 is for individuals who receive income from salary. On the other hand, Form 16A is for TDS on income sources apart from salary. While Form 16 is issued annually to the employee, Form 16A is issued quarterly. You can further refer our guide on Form 16 for more information.

Taxpayers are required to file ITR in this case, too, where their TDS is applicable on “Income other than Salary.

Form 16A Format

The format of Form 16A may vary depending on the deductor's software and the format prescribed by the Income Tax Department. However, the following are the general details that are included in Form 16A:

1. Name and address of the deductor and the deductee
2. PAN of the deductor and the deductee
3. Assessment year for which the certificate is issued
4. Quarter for which TDS has been deducted
5. Nature of payment on which TDS has been deducted
6. Date of payment and date of deduction of TDS
7. TDS amount deducted and deposited with the government
8. Challan number and date of deposit of TDS with the government
9. Unique TDS certificate number
10. Any other relevant details as required

When is Form 16A Required?

Now that we know what Form 16A is all about, what it looks like, and what information it carries it is crucial to know why Form 16A is required. When you are filing your income tax return, the tax will be calculated on your total income. Now, if you do not claim TDS mentioned in Form 16A or Form 26AS, then you may end up paying tax twice on the income on which TDS has already been deducted and paid to ITD on your behalf. Therefore, Form 16A, which acts as proof of your taxes already paid, should be kept handy while filing your ITR.

It should be noted that Form 26AS should always be matched with Form 16/16A. In case of any mismatch, you should immediately contact the deductor. If the mismatch is not corrected then you will not get credit for the correct TDS.

Here’s why Form 16A is important -

• Tax Filing: Form 16A is vital for accurately filing taxes as it helps individuals report their total income, including non-salary sources.
• Income Tax Return (ITR): Form 16A data is necessary for filing the Income Tax Return (ITR) to ensure accurate reporting of total income and compliance with tax regulations.
• TDS Tracking: Form 16A assists individuals in tracking the amount of Tax Deducted at Source (TDS) paid on their non-salary earnings by providing a summary of the TDS deducted by the deductor.
• Proof of Income: Form 16A serves as an authorized proof of income, demonstrating the individual's earnings from various sources. It is widely accepted as evidence of income by financial institutions, government agencies, and other entities.
• Loan Applications: Form 16A is crucial in supporting loan applications as financial institutions often require it to verify the individual's income and assess their loan eligibility. It offers a comprehensive overview of the individual's financial situation.

How to Fill Form 16A?

Form 16A is issued by the deductor to the deductee after deducting tax at source (TDS) on certain payments such as interest, commission, rent, etc. The following are the steps to fill in Form 16A:

1. Download the format of Form 16A from the Income Tax Department's website or use the format provided by the deductor's software.
2. Fill in the name and address of the deductor, PAN of the deductor, and the unique TDS certificate number.
3. Fill in the name and address of the deductee, PAN of the deductee, and the assessment year for which the certificate is issued.
4. Mention the quarter for which TDS has been deducted, the nature of payment on which TDS has been deducted, and the date of payment and date of deduction of TDS.
5. Fill in the TDS amount deducted and deposited with the government, challan number, and date of deposit of TDS with the government.
6. Provide any other relevant details as required.
7. Sign and print Form 16A and issue it to the deductee within 15 days from the due date of furnishing the statement of TDS.

Which Types of Payments Under Form 16A Attract TDS?

We have generally seen Form 16A in case of TDS deduction by the bank or case of commission income, but let's understand what are the other scenarios under which Form 16A can be issued.

Some cases of payments for which Form 16A is issued are

1. For Interest
2. For Professional Services
3. For Commission or Brokerage

In other words, we can also say that Form 16A is issued for payments other than:

• Payment of salary: For this, Form 16 is issued
• Sale of property: For this, Form 16B is issued
• Payment of rent u/s 194IB: For this Form 16C is issued

In a nutshell, it can be said that Form 16A is issued in all such cases where Form 16, Form 16B or Form 16C is not issued.

How to Download Form 16A?

• Step 1: Login to TRACES
  TRACES is an online platform that is maintained by the Income Tax Department of India. It is used to manage TDS statements, generate TDS certificates, and perform various other functions related to TDS.
• Step 2: Enter your details
  PAN, Password, and Captcha Code. After entering these details, click on the ‘Login’ button.
• Step 3: Go to ‘Downloads’ and select ‘Form 16A’
• Step 4: Select the relevant quarter
  You can select the quarter by clicking on the dropdown menu next to ‘Quarter’.
• Step 5: Verify your details
  You can do this by clicking on the ‘View’ button next to your name.
• Step 6: Download Form 16A
  The Form 16A will be downloaded in a PDF format.
  Check the downloaded Form 16A an ensure that the document contains all the necessary details. The document should have the following headings:
  • Name and address of the deductor
  • PAN and TAN of the deductor
  • Name and address of the deductee
  • PAN of the deductee
  • Assessment year for which the TDS is deducted
  • Date of payment
  • Amount paid
  • Amount of TDS deducted
  • Challan details

If any of these headings are missing, you should contact your employer to rectify the error.

How to Verify Form 16A Online?

There are two ways to do KYC validation:

• Log in to the TRACES official portal. With DSC (Digital Signature Certificate): Click on the ‘Validate’ option, enter the DSC password, and click on ‘Sign’.
• Without DSC: Enter details such as the Token number of IT return filed, challan details, PAN, and TDS amount deposited. Click on ‘Proceed’.

After the KYC details have been validated, a success message and a request number will appear. Wait for 24-48 hours after the request status is ‘Submitted’. Form 16A can be accessed and downloaded from the ‘Downloads’ section using the request number when the status is ‘Available’.

Rate of TDS Deduction in Various Cases of Form 16A

If you still feel unsure about efiling Income Tax Returns yourself, you can easily hire an eCA to do it for you. Don’t wait any longer; book your eCA today!