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Difference Between Form 16 & Form 16A

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In respect of Tax deducted at source,or tax paid ,on or before 31st Mar,every deductor must issue a certificate of deduction of tax at source to every person from whom tax has been deducted. These certificate issued by the authorized tax deductors are called as TDS certificates. Both Form 16 and Form 16A states the details of your earnings and the tax deducted on your behalf and paid to the government. These Forms are essential for filing Income Tax Return (ITR), so if Nil TDS has been deducted then these forms are not required to be issued. Form 16 and 16A is similar in nature with some differences.

What Is Form 16?

Form 16 is applicable to the salaried person who draws salary per month. Income from several sources is subjected to tax deduction at source, one of which is salary. If you are a salaried employee in an organization and your salary is above the exemption limit of tax slab then your employer deducts the applicable tax from your salary and you will get your salary after tax deduction. This process is called as Tax Deduction at Source (TDS).

At the end of the financial year, the company needs to provide all the details about the salary payments made for the last one year and the amount of tax deducted. All these details issued by the employer are in the form of TDS deduction certificate known as Form 16. This certificate is issued to you by your employer stating the details of the salary you have earned and the tax deducted on your behalf and paid to the government. Lets for an instance if you have worked for more than one employer in a financial year then you must obtain Form 16 from all your employers in last financial year before filing your IT return.

  • If you are an employee of the company you should receive your Form 16 with in one month from the end of financial year i.e. by April 30 every year.
  • If TDS is deducted by banks to the pension holder, banks also need to issue Form 16.

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What Is Form 16A?

Other than tax deduction at companies for salaried employees there is many other areas where TDS can be applicable like deducing the tax for interest earned by your Fixed Deposit in the Bank. Here bank is the person who deducts the tax. For every financial year they must issue a TDS certificate to the customer. They have to fill the Form 16A and hand over to the customer.

Form 16A is issued in the following cases:

  • For interest on securities; dividends;
  • interest other than interest on securities;
  • winnings from lottery or crossword puzzle;
  • winnings from horse race;
  • payments to contractors and sub- contractors;
  • insurance commission;payments to non-resident sportsmen/sports associations;
  • payments in respect of deposits under National Savings Scheme;
  • payments on account of repurchase of units by Mutual Fund or Unit Trust of
    India;
  • commission, remuneration or prize on sale of lottery tickets;
  • rent;
  • fees for professional or technical services;
  • income of foreign companies referred to in section 196A(2);
  • income from units referred to in section 196B;
  • income from foreign currency bonds or shares of an Indian company referred to in section 196C;
  • income of Foreign Institutional Investors from securities referred to in section 196D

Time limit for submitting form 16a is 2 months and one week from the date of deducting tax like the last date for submitting form 16a for tax deducted on 31 March is 07 June.

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