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What Is the Difference Between Form 16 and Form 16A?
Form 16 and Form 16A are essential documents for filing the tax return. While both these files have similarities, they also differ in many parameters, which confuse first-time taxpayers. Hence, it is imperative that individuals know the difference between Form 16 and 16A. However, before delving deep into the comparison, you must know about Form and 16A.
Stay tuned to learn everything about Form 16A and Form 16 and their differences!
What Is Form 16?
Form 16 is the salary TDS certificate. Through this certificate, the employer clarifies the break-up of salary earned by an individual in a financial year and the amount of tax deducted at source (TDS).
According to section 203 of the Income Tax Act, employers issue Form 16 to their employees. Form 16 is also known as a salary certificate.
Form 16 is applicable in certain circumstances, such as -
- If the individual earns a salary of more than ₹2,50,000 in a financial year, it will undergo tax deduction at source, duly deposited with the Government (as per the Income Tax Act).
- If employees work in multiple companies in a financial year, they will get different Form 16 from each employer given the salary is above ₹2,50,000.
Form 16 is an acknowledgement that declares the Government has received the applicable tax. This certificate has two parts. Part A and Part B.
While part A concerns income other than salary, part B focuses on income from the sale of immovable property other than agricultural land. While part B is clear to understand, individuals often get confused regarding the other incomes deducted at source. Subsequently, they must know the difference between Form 16 and Form 16A. But before that, let’s learn about Form 16A in detail.
What Is Form 16A?
Similar to Form 16, Form 16A is also a TDS certificate. Whereas Form 16 is applicable for only salary income, Form 16A concerns income from sources other than one’s salary, such as return on investment on mutual funds, fixed deposits and other capital gains.
Here, the rates of returns that come under section 203 of the Income Tax Act 1961 are set by the Government from time to time and issued to individuals.
Form 16A contains information such as name and address details of deductee or deductor, Challan, PAN or TAN details, etc. Further, it has information related to income earned by individuals, tax deducted at source and amount deposited with the Government.
From the above piece, you have gained a clear knowledge about both Form 16 and Form 16A. So, let’s focus on the parameters that can help individuals to identify Form 16 and 16a difference.
Difference Between Form 16 and 16A
Form 16 vs 16A
Parameters | Form 16 | Form 16A |
Applies to | This certificate applies to salaried employees who have a taxable income. Also, their tax must have been deducted at the source by the employer. | This certificate applies to self-employed or professionals who have documents related to qualification and degree. |
Document Required | Along with this certificate, individuals must submit salary slips, PAN cards, and Aadhaar cards. | Along with this certificate, individuals must submit capital gain statements, PAN cards, and Aadhaar cards. |
Uses | This certificate contains data related to salary breakup, including bonuses, allowances or other tax savings details declared by individuals to employees. These details benefit salaried individuals in filing an income tax return. Further, this certificate helps in clearing tax credit, visa processing. Also, individuals can use the certificate as income proof. | Individuals can use this certificate to file income tax returns and calculate the total amount of payable tax. |
Issued Against | Salaried individuals receive this certificate. | Non-salaried individuals receive this certificate. |
Issuer | Employers issue Form 16. | Financial institutions, tenants, banks, etc., issue Form 16A. |
Time Duration | The certificate must be issued by 15th June of the respective financial year. However, the Government extends this due date under certain circumstances. | The due date of Form 16A is the 15th of the month which comes after the due date of quarterly TDS return. |
Verification | Individuals can complete the verification process of Form 16 on the online portal. | Concerned individuals can carry out the verification process of Form 16A via the online portal. |
Now that individuals know what the difference between Form 16 and Form 16A is, they can easily streamline the income tax filing process as per their income slab and category.
