Form 16A: Eligibility, Documents and Importance

There are certain documents associated with income tax return filing that serve significant purposes to all working individuals. There should be no negotiation on the grasp over the understanding of such documents. While you must already be aware of Form 16- a certificate of the tax deducted. Today, you will learn about Form 16A, which is slightly different from Form 16, and how it works.

What Does Form 16A Entail?

Form 16A refers to the TDS (Tax Deducted at Source) certificate that expresses the TDS amount, the TDS payments deposited to the Income Tax Department, and the nature of payments. Form 16-A is used to signify the utility of remunerations of the non-salaried nature. It features a professional fee for tax deducted at source, rent payment, and bank interest.

Let us understand how Form 16 A works with an illustration:

Mr. Sharma makes a payment to Mr. Mehta, after which the Income Tax Department necessitates that a particular portion of the payment in total that has been made for Mr. Mehta be deducted by Mr. Sharma. Then, it is paid directly to the Income Tax Department.

This entire process is popularly known as tax deducted at source (TDS). Here, Mr. Sharma is the deductor, and Mr. Mehta is the deductee. In this scenario, the deductor will transfer the payment to the Income Tax Department and also give a TDS certificate.

Form 16A Format: Components in Form 16A

There are four components in the Form 16A format. Here’s what they are.

• Deductor details include their name, PAN, TAN, the bank name from which TDS has been deducted, the insurance company where the TDS is applicable, and any other income of yours on which the TDS is applicable.
• Deductee details, including your name and PAN.
• Payment section involving the date, amount, and nature of the payment.
• TDS payment receipt number.

It is mandatory to specify all these details in Form 16A at the time of ITR filing.

Form 16A is a TDS Certificate that features all TDS amounts, the nature of such payments, and TDS payments deposited to the Income Tax Department (ITD). Rent, professional fees, bank interest payments to the Income Tax Department look after the insurance of a TDS Certificate.

How to Download Form 16A Online?

The deductor issues Form 16A for the current financial year. It projects the total earnings and the total income taxes that have been deducted for a financial year from your other income sources apart from your salary. You can visit the official website of the Income Tax Department to get Form 16A. You will find this form available on the official website of the Income Tax Department of India as a PDF file.

Here are the steps to fill Form 16A online:

Step 1: Go to the official website of the Income Tax Department India.

Step 2: Then log in to TRACES.

Step 3: Head to the “Downloads” tab.

Step 4: Select “Form 16A”.

Step 5: Furnish the required details in the form.

Step 6: Click the “Go” button.

Once these steps are done, you can download the concerned form and proceed with the process accordingly.

Filling Form 16A: Details Required in the Form 16A

Let us look at the mandatory set of details required in this form. While filling the form, ensure all the details are correct.

• Enter the name of the deductor and their address. When you input the address, make sure that you fill in their PIN or the Postal Index Number as well.
• Fill in the TAN (which is an alphanumeric number featuring the first 4 digits in alphabets and the remaining 5 in numerals and 1 alphabet) of the deductor.
• You will also be required to fill in the PAN (Permanent Account Number) of the deductor. This mention, just like TAN, features an alphanumeric number with its first 4 digits in alphabets and the remaining 5 in numerals, and 1 alphabet.
• Fill in the information for 4 acknowledgment numbers.
• Mention the nature of payment (contractual, professional, etc.)
• Enter the corresponding codes for all payments mentioned.
• Enter the name of the deductee whose TDS has been deducted.
• In the column, enter the PAN number of the deductee whose TDS has been deducted.
• Mention the financial year for which this information is being provided. For example, for the current financial year, the period will go from 1st April 2019- 31st March 2020.
• Once you are done filling in all these details, enter the deduction details for the TDS. Mention the TDS amount in words. In this section, the following TDS deduction details are required:
  • Slot number or the serial number.
  • Amount paid or credited.
  • Date of payment or credit.
  • Tax deducted at source.
  • Surcharges
  • Education Cess.
  • The total tax that has been deposited to the ITD or the Income Tax Department.
  • Cheque number or Demand draft (DD) number (if any).
  • BSR code of the concerned bank branch.
  • The date on which the tax was deposited (DD/MM/YY format).
  • Challan identification number or transfer voucher.

Importance of Form 16A: When is Form 16A Required?

Below mentioned are some scenarios wherein an individual needs Form 16A.

• When you file your Income Tax Returns for a financial year with the ITD and draw income from other sources besides the salary that has the TDS (tax deducted at source) then you require Form 16A.
• Usually, the banking and financial institutions utilise this form in their verification process to approve loan applications or applications for credits of any sort.

Incorrect Details in Form 16A- How to Fix Discrepancy in Form 16A?

Taxpayers can go through Form 16A to verify details using TRACES (TDS Reconciliation Analysis and Correction Enablement System) of the Income Tax Department.  Individuals can check details about the deduction by simply accessing Form 26AS and inserting the TAN and PAN of the employer along with the financial year and certificate number. It is recommended that taxpayers should reach out to their employer in case any kind of discrepancy is found in the details and ask them to correct details with required changes.

Mentioned below are the major reasons behind the presence of errors in the details and information mentioned in the Form:

• Failure to file TDS or TDS return.
• Wrong PAN/TAN details.
• Missing details related to the TDS payment in TDS Return.
• Quoting incorrect amount.
• Quoting wrong challan identification number.

How Different is Form 16 from Form 16A – Difference Between Form 16 and Form 16A

Comprehending the difference between Form 16 and Form 16A can be a bit confusing. Let us understand how these two documents draw a contrast from each other.

Like Form 16, Form 16A is also a TDS Certificate under Section 203 of the Income Tax Act. However, Form 16 is used solely for the salary income, while Form 16A is used when there is TDS on the income earned from other sources apart from salary.

Let us look at some other key differences between Form 16 and Form 16A.

Frequently Asked Questions (FAQs)