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