Let's break it down: Form 16, Form 16A, and Form 16B. These three tax forms can be confusing, but we're here to clarify them for you.
In this blog, we'll explain each form, how they differ, and what they mean for you. Get ready for a simple and easy-to-understand guide to these tax forms!
Form 16 is your salary TDS certificate. It's a crucial document for taxpayers provided by your employer, as it helps you file your income tax return accurately.
Part A of Form 16 is a certificate generated and issued by your employer. Part A of Form 16 is usually generated and issued through the TRACES (TDS Reconciliation Analysis and Correction Enabling System) website. It includes the following details:
Part B of Form 16 provides a detailed breakdown of salary components, exemptions, deductions, and tax computations. It includes:
Form 16B is a certificate issued in India related to the purchase of property, specifically related to the deduction of Tax Deducted at Source (TDS) on the sale of property.
Here is a handy table that will clarify the key differences between Form 16, 16A and 16B:
Please note: Tax regulations may change over time, so it's essential to verify the latest requirements and forms with the Income Tax Department or a tax consultant to ensure compliance with current regulations.
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 clarifies their tax liability and allows them to file for relevant tax refunds.
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 selling 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.
The issuer shares form 16A at the end of each quarter of the financial year. It may also be shared on an annual basis. You can also download 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. Under Form 26AS, all the pertinent TDS details will be available.
Form 16B is generated for each applicable property sale and issued by the property purchaser. The TDS is deposited by the purchaser to the IT department, and subsequently, the form can be downloaded via the TRACES site, similar to Form 16A.
The following individuals or entities are eligible for Form 16A:
Form 16A is not related to a minimum salary requirement. Instead, it is a certificate issued for TDS on income other than salary, such as interest, rent, or commission.
For Form 16, which is issued for TDS on salary income, employers have no specific minimum salary requirement to issue Form 16. Employers must provide Form 16 to their employees if TDS has been deducted from their salary during the financial year, regardless of the salary amount.