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What is the difference between Form 16, Form 16A and Form 16B?

  • Highlights

  • Understand Form 16, Form 16A, Form 16B for filing ITR

  • Differences between Form 16, Form 16A and Form 16B

  • Use Form 16A for Income other than salary

  • Use Form 16B for income earned from sale of immovable property

Form 16, Form 16A and Form 16B are all certificates of tax deducted at source on your income from different sources. All three of them vary in terms of purpose, eligibility, and where they are applicable.

Form 16, Form 16A and Form 16B

Form 16: The TDS Certificate for your salary

The most common financial document all working employees come across while filing their Income Tax Returns is the TDS Certificate or Form 16.

It is a certificate of tax deducted at source on income from your salary and which has been duly deposited with the Government exchequer. Employees drawing a salary of less than Rs. 2.5 lakh in a financial year are exempted from income tax and do not get any Form 16.

If an employee works for more than one employer or switches jobs in a financial year, he/she would get a separate Form 16 from each employer provided the salary from the employer is more than the threshold limit of Rs. 2.5 lakh.

Additional Read: How to file Income Tax Returns Online with Form 16?

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Form 16A: The TDS Certificate for Income Other than Salary

An individual can have income from sources other than his/her salary, such as returns on investments on fixed deposits, mutual funds, gold bonds, and other capital gains. Many of these returns incur income tax at a rate specified by the government from time to time, and in this case, financial institutions are bound to deduct tax at source, and thereby have to issue you the TDS certificate known as Form 16A.

Anyone paying a monthly rent of Rs 50,000 or more for a building/land too is required to deduct tax at source and thereby deposit the tax with the Central Bank Account. The tenant thereupon has to issue Form 16A to the owner of the property.

Anyone earning a commission for the sale of insurance products too is liable for TDS by his/her employer, who in turn has to issue Form 16A to the agent.

Additional Read: Uses of Form 16

Form 16B: The TDS Certificate for Sale of Property

Form 16B certifies that the tax has been deducted at source on the income earned from the sale of immovable property (building or a part of it/land) other than agricultural land, and the TDS has been deposited by the property buyer with the Income Tax department.

According to the rules laid down by Government of India, any person who purchases property from a resident transferor needs to deduct tax at source on any money or consideration paid. TDS is deducted from all immovable property purchase in India. Immovable property is the property including land or any building that does not include agricultural lands.

While employers and financial institutions require a TAN before they can deduct/collect TDS, tenants and property buyers do not require a TAN and can only furnish their PAN details while depositing the TDS with the government.

When it comes to filing your returns, it is easy to get confused between Form 16, Form 16A and Form 16B. You may also have heard that Form 16 has two parts – Part A and Part B. These two parts of Form 16 however, are different from Form 16A and Form 16B. It is important to remember these differences when filing your returns, so that you don’t face any issues.

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