Definition of Form 16A
Form 16A, in simpler words, is a statement given to the person who has TDS on certain payments like rent, commission, etc that basically aren’t salary. It clearly shows the information of the TDS that was taken out and deposited to the government on behalf of the employee.
Documents like Form 16A play a vital role when it comes to income tax compliance. This certainly means every working individual, especially HR professionals, should be aware of this important certificate.
Having a clear understanding of Form 16A will aid you in educating your employees while helping your company stay compliant.
So, let’s explore:
- What is Form 16A?
- Why is Form 16A Important?
- Difference Between Form 16A and 16B
- Who Receives Form 16A and Under What Circumstances?
- What Information and Details are Typically Included in Form 16A?
- How to Download Form 16A From Income Tax Site?
What is Form 16A?
Employers issue Form 16A to employees when they collect tax at source. The Income Tax Act of 1961 says that TDS must be added to amounts over Rs.30000 that are not exempt. This certificate is treated as proof that TDS was taken out of income sources other than pay, and it gives important information about those sources.
This certificate is shared every three months. It’s important to remember that the due date is usually the 15th of each month.
Need to mention, the information included in this certificate can also be found in Form 26AS.
Why is Form 16A Important?
Take a look at five points as to why Form 16A is significant for a working individual:
● Taxes:
The details on Form 16A come in handy to correctly file taxes. It helps a person to record all of his or her income, even if some of it doesn’t come from a salary.
● Tax Return (ITR):
A person cannot file his or her Income Tax Return (ITR) without a Form 16A. It checks if the total income is reported correctly and that it is compliant with all statutory laws.
● Tracking TDS:
Form 16A also aids people in checking how much TDS they’ve paid on their non-salary income. It gives an overview of the TDS that the deductor took out.
● Proof:
As mentioned earlier, a Form 16A certificate is a valid proof of income that shows how much money the person makes from different sources.
● Loan Applications:
Not many know that Form 16A is a part of loan applications as well. Financial companies use this certificate to check a person’s income and see if s/he can afford a loan. They typically get a full picture of the person’s financial position.
Difference Between Form 16A and 16B
Form 16 basically has two parts namely Part A and Part B.
If Form 16A is considered, it has data about the employer and employee, such as their name and address, PAN and TAN numbers, the length of their employment, and the amount of TDS both deducted as well as deposited.
Form 16B, on the other hand, has information about the salary, other income, expenses, taxes due, and other things.
Who Receives Form 16A and Under What Circumstances?
Simply put, Form 16A is a TDS certificate that an individual gets when s/he gets paid for something other than his or her salary. Say, for instance, the interest on fixed savings, the commission from life insurance, and so on.
What Information and Details are Typically Included in Form 16A?
Take a look at some of the basic details you will find on Form 16A:
- Name, address, and PAN details of both the deductor and the deductee
- The assessment year
- The quarter in which TDS was deducted
- Type of payment
- The date of TDS payment
- The date of TDS deduction and deposition
- The Challan number and the date that TDS deposition
- TDS certificate number
- Any other information that is needed
How to Download Form 16A From Income Tax Site?
Here’s a step-by-step process to download Form 16A:
– Sign in to TRACES.
Enter your User ID, Password, TAN or PAN, and the captcha code to log in to TRACES.
– Choose Form 16A
From the drop-down section under the “Downloads” tab, choose “Form 16A.”
– Pick the financial Year and PAN.
Pick the PAN, the Financial Year, and the Quarter for which you want to download the TDS certificate. Click “Go” when you’re done. There are two ways for the deductor to get Form 16A: “Search PAN” or “Bulk PAN” files.
– Information of the Person
All of the information about the authorized person will be filled in automatically on the screen. You will also find the same information on Form 16A. Check it, then click “Submit.”
– KYC
Validate KYC. You will get two options, i.e. with or without a DSC (Digital Signature Certificate).
– Text Message of Success
You will get a message and a request number once you are done with the KYC. Using this request number, you can get Form 16A in the “Downloads” area.
– Download
Fill in the Request Number or Date or click View All. If it says “Available”, then click on “Download.”
– Get the TRACES Utility
Don’t open the files; instead, click on “Requested Downloads” in “Downloads.” Now tap on “Click Here” and on the next page, enter the captcha code.
Voila, we’re done!
Now that you know everything about Form 16A, you can approach discussions about this crucial document with utmost confidence.