Before Filing Income Tax Return, it is necessary to possess Form 16, if working with an organisation, or Form 16A, in case of payment other than salary. Both Form 16 and From 16A is a TDS certificate which give an assurance that the amount of TDS deducted, Nature of Payment and TDS Deposited with the Income Tax Department. So if Nil TDS has been deducted then these forms are not required to be issued.
What is Form 16?
Form 16 is for person employed in an organization, who draws monthly salary. In case your salary is above maximum limit which is not chargeable to tax, the employer deducts certain amount of money before handling salary to you. The process is called tax deduction at source.
Form 16 is an important document that is in accordance with the rules and regulations laid down by Section 203 of Income Tax Act for Tax Deducted at Source from Income chargeable under the head “Salaries”.
At the year end the employer is required to provide a detailed statement of Salary Payments and TDS deducted thereon. This statement is termed as From 16.
Form 16 is very necessary as it acts as salary proof and tax paid to the government. The Form 16 provides complete details of the salary details of the employee along with necessary adjustments for income tax. Form 16 is applicable for only salaried people.
In case, if you have worked in two different organization in a single year than you have to obtain two different Form 16s from the two companies in order to file the IT returns. If your previous employer denies to issue Form 16 then the best option is to fill Form 12B and submit it to your new employer. The employer will take into account the previous salary you earned while deducting tax.
You can also revise and submit fresh Form 16 in case there is an error in Figures. However, it is not compulsory to give the form 16 to the employee if there is no TDS deducted.
What is Form 16A?
This form is for non salaried employee who work as a professional for an organization. This is used in various cases where tax is deducted. Same as Form 16, deductor needs to issue form 16A to person to whom TDS is deducted at the end of financial year.
Form 16A is also an important document that is in accordance with the rules and regulations laid down by Section 203 of Income Tax Act for Tax Deducted at Source from the Income other than Salary.
Say for example, interest earned on bank fixed deposits, will results in tax being deduced at source, subject to the interest income being over Rs 10,000. In such cases each financial bank issues TDS certificate to the customers.
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
Difference between Form 16 and Form 16A
The difference between Form 16 and Form 16A is that the TDS deducted on Salary is reflected in Form 16 and TDS Deducted on Other Payments is reflected in Form 16A. Moreover Form 16 is generally issued annually whereas Form 16A is issued quarterly.