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What is the Difference Between Form 16A and Form 16B

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What is the Difference Between Form 16A and Form 16B

Table of Contents

Every taxpayer has heard of Form 16. But not everyone may know the difference between form 16A and 16B. These documents serve as proof that your taxes have been remitted to the government on your behalf. Let us understand the relevance and key differences between Form 16A and 16B.

Form 16A vs Form 16B

Form 16A is focused on income earned for the financial year from sources other than regular salary. Examples include interest on fixed deposits, gains received by redemption of mutual fund units, dividends received, commission on insurance, etc. Form 16A contains the details of all these monies and the corresponding TDS deducted by the issuer. Moreover, it also contains the details of the deductor, such as name, PAN, TAN, and the nature of the transaction.

Form 16B is solely applicable for gains made through the sale of immovable property like a house, a shop, or a plot of land. It specifically accounts for sale transactions over ₹50 lakh in value and exempts any property that is deemed agricultural in nature.

Differences between Form 16A and Form 16B

Here is a handy table that will make crystal clear the key differences between Form 16A and 16B.

Criteria

Form 16A

Form 16B

Nature and Purpose

Form 16A is a certificate that confirms the tax deducted at the source for income other than the main salary

Form 16B, on the other hand, is a certificate that confirms the gains made through the sale of an immovable (non-agricultural) property

Applicability

Form 16A is applicable for people who are self-employed, freelance consultants or have earned income through interest on FDs, dividends on stock holdings, insurance commission, mutual funds returns, etc. 

Form 16B is applicable only when income has been earned through the sale of a non-agricultural land or building and in excess of ₹50 lakh during the financial year.

Issuing Authority

Form 16A is issued by the deductor which can either be an institution like a bank, insurance company, mutual fund house, stock brokerage firm, etc. It can also be issued by an individual who has deducted the TDS on the amount paid, other than salary income. This is applicable in the case of professional consultants or freelance workers. 

Form 16B is issued by the deductor, who is the person or consortium that is the buyer of the property. If you have sold your property worth ₹50 lakh and above, then this TDS is deducted by the buyer and Form 16B is issued as evidence of the amount being paid to the government on your behalf. 

Frequency of Issuance

Form 16A is issued every quarter (at the end of three months) and/or at the end of each financial year. 

Form 16B is only issued for each transaction in the case of applicable transactions based on the aforementioned eligibility. 

Other Means of Access

Form 16A can also be downloaded from the issuing organization's website or directly through Income Tax Department’s TRACES website

Form 16B can only be downloaded through the TRACES website.

Requirement of TAN

Form 16A requires you to provide the Tax Collection Account Number (TAN) and the PAN for the deductor

TAN not required for Form 16B. Only the PAN will suffice

Relevant Income Tax Act

Form 16A is necessitated by Section 203 of the Income Tax Act of India

Form 16B is required under Section 194 of the Income Tax of India

While there are clear differences between Form 16, 16A, and 16B, together, they help the IT department to reconcile your collective earnings for the year and assess your tax liability. For taxpayers, it provides clarity on their tax liability and allows them to file for relevant tax refunds.

Frequently Asked Questions

1. What are Forms 16A and 16B?

Form 16A is a TDS document that certifies all your earnings from sources other than a fixed salary. There can be multiple Form 16A issued by different authorities such as banking or financial institutions, insurance companies, and even people who may have paid you for professional services.

Form 16B is also a TDS certificate but is applicable only in the case of income earned by the sale of a non-agricultural property that includes a building, apartment, shop or plot. Moreover, it is only issued when the income exceeds ₹50 lakh in the financial year.

2. How can I get Forms 16A and 16B?

Form 16A is shared by the issuer at the end of each quarter of the financial year. It may also be shared on an annual basis. You also have the option of downloading Form 16A through the website or mobile app of the issuing institution. Furthermore, it can be downloaded directly by visiting the Income Tax Department’s website and accessing the TRACES page. Here, under Form 26AS, all the pertinent TDS details will be available.

Form 16B is generated for each applicable property sale and is issued by the purchaser of the property. The TDS is deposited by the purchaser to the IT department, and henceforth, the form can be downloaded via the TRACES site, similar to Form 16A.

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