Form 16A Demystified : Your Guide to Tax Deducted at Source (TDS)
- Juhi Verma
- September 19, 2023
- Informational Blogs, TDS
- 0 Comments
FORM 16A Demystified – A COMPREHENSIVE GUIDE
Form 16A Demystified : Form 16A is a Tax Deducted at Source that helps taxpayers conveniently compute and pay applicable taxes. To make the most of this particular document, taxpayers should be aware of its components, generation, and verification process, among others. This guide will give you an overview of Form 16A.
WHAT IS FORM 16A?
Form 16A is a (TDS)Tax Deducted at Source Certificate issued by employers on deducting Tax at Source. According to the Income Tax Act, 1961, payments over Rs.30000 not entitled to exemptions are liable for TDS. Form 16A serves as evidence that TDS was deducted from income sources other than salary and provides necessary details.
REQUIREMENT OF FORM 16A
When you file an ITR (income tax return) annually with the Income Tax Department, and you have income from another source apart from your salary that has the TDS, then Form 16A is required.
Bank and finance bodies also use Form 16A to verify the application of loans and credit.
Components of Form 16A
The primary elements of Form 16A are:
- Employer’s details- Name, TAN and PAN
- Employee’s details- Name, TAN and PAN
- Nature of payment- offline or online mode
- Receipt number of TDS payment- it helps to track back details
- The date and deposit tax amount with the income tax department helps track information.
How to get the Form 16A?
This document is issued for the present financial year by your Deductor, and it mirrors the total earnings and total income taxes deducted for that financial year from another source of income apart from your salary. You can download Form 16A In PDF format from the website of the Income Tax Department.
How to download the pdf of Form 16A?
You can download Form 16A from TRACES and consider it a valid TDS certificate, per CBDT circular 04/2013 dated 17th April 2013. Form 16 A is created only for a valid PAN.
Step 1: Log in to TRACES- To log on to TRACES, enter your User ID, Password, TAN or PAN, and the captcha code.
Step 2: Select Form 16A- Under the ‘Downloads’ tab, select ‘Form 16A’ from the dropdown menu.
Step 3: Select Financial Year and PAN- Select the Financial Year, Quarter for which you want to download the TDS certificate, Form type, and PAN. Once done, click on ‘Go’. The Deductor can generate Form 16A through the “Search PAN” or “Bulk PAN” downloads option.
Step 4: Details of authorized person- All the details related to the authorized person will be auto-populated on the screen. The exact details will appear on the Form 16A. Verify and click on ‘Submit’.
Step 5: KYC validation- KYC Validation using DSC: Financial Year, Quarter, and Form Type will be auto-populated. Click on ‘Validate. Then, enter the DSC password and click on ‘OK.’ Now, select the DSC and click on ‘Sign.’
Step 6: Success Message- Once the KYC details are validated, a success message and a request number will appear on the screen. Using this request number, you can access Form 16A from the ‘Downloads’ section. You can download Form 16A if the status is “Available.” You will have to wait for 24- 48 hours if the position of request is ‘Submitted.’
Step 8: Download TRACES utility- Go to downloadsand click the download requested button. Click’ Click Here’ and enter the captcha code on the next page.
Step 9: Now, click on TRACES PDF Converter V 1.5 Light Version to download the utility for converting Form 16A to PDF.
Which type of payments of Form 16A attracts TDS?
Section 206C of ITA mentions non-salary earnings that attract TDS; each income has a different rate.
- Dividends
- Rent
- Interest accrued on bank accounts
- Winnings from a lottery or crossword puzzles
- Payouts toward a contractor
- Insurance commission
- Payouts for National Savings Scheme
Importance of Form 16A
Financial Institutions use this certificate to complete the verification process before extending financial products, including secured and unsecured loans. The following pointers highlight the importance of Form 16A: –
- The information available in this certificate helps file taxes.
- It also helps in filing ITR.
- It helps to trace the amount of TDS paid on other earnings.
- It is an authorized proof of income.
- This certificate helps to improve loan eligibility.
Difference between Form 16 and Form 16A
Both Form 16 and Form 16A are TDS certificates but differ according to their parameters. The following pointers are the fundamental differences between Form 16 and Form 16A.
- Form 16 is a TDS certificate for salary income, whereas Form 16A is for another source of income apart from salary.
- The employer issues Form 16, whereas the financial institutions and other concerned entities issue Form 16A.
- Form 16 is used for deducting Tax from salary, whereas Form 16A is for removing taxes from another source of income apart from salary.
- Components of Form 16 are Proof of income, employer’s PAN, employer’s TAN, employee’s PAN, tax amount paid in place of the employee by the employer, and payment acknowledgment. In contrast, components of Form 16A are the Deductor’s bank and TAN, the deductee’s PAN, the amount of Tax paid, and the TDS payment’s receipt number.
Conclusion
Paying taxes is the responsibility of the citizens of the nation. We know that the process of filing Form 16A is hectic and time-consuming. Some terms are unknown to the new taxpayer, but worry not; Eazybills is at your service to take the burden off your shoulders and help you with the TDS tracking. Connect to us through our website, where our customer-oriented team will guide you according to your needs, and for more information read our website blogs.
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