Form 16A is a tax deduction certificate issued under section 203(1) of the Income Tax Act, 1961; provided by the tax (TDS) deductor to the recipient for payments received other than salary income. Form 16A gives a summary of TDS paid on behalf of the deductee for the quarter.
What you need to know
Income other than Salary received by an individual shall be subject to TDS based on the threshold limits and prevailing rates in force. Form 16A is essentially a TDS Certificate issued by, for eg: Banks for FD interest income, EPF for Provident Fund withdrawals, Listed companies for dividend income etc. It will be issued by the tax deductor on a quarterly basis, within 15 days of filing the TDS return.
Also read - PF Withdrawal Form 31
What is the difference between Form 16 and Form 16A
It is important not to confuse Form 16A with Part A of Form 16. Although they are both TDS Certificates, Form 16 (Part A & B) is issued by an employer to salaried individuals and Form 16A is issued for tax deducted under Other Heads of Income.
There are also other Tax deduction certificates for certain specified payments like Form 16B for payment arising from the sale of immovable property and Form 16C for housing rental payments.
Form 16 is provided every year whereas Form 16A is furnished every quarter.
Form 16A format
The primary details covered in the Form 16A format are:
- Name and address of the Deductor and Deductee
- PAN of the Deductor and Deductee
- TAN of the Deductor
- Relevant period i.e. Assessment Year of the certificate
- Particulars of TDS payment based on nature along with applicable Income Tax section number
- Tax deducted and remitted on behalf of Deductee to the government
- Bank remittance details (BSR Code of branch, Challan serial number, date of deposit)
When is Form 16A Required?
Form 16A is one of the fundamental inputs an individual needs to accurately file their Income Tax (IT) returns. Essentially, after the IT Return asks for details of Income under each head i.e. Salaries, House Property, Other Sources etc; the ITR Form would auto-calculate tax dues according to applicable slab and tax rates. This is where Form 16A comes into play as an evidence for taxes already paid. Taxes due can be set off against taxes paid; resulting in “Nil” taxes due.
To ensure proper tax credit is claimed, you must download Form 26AS from TRACES website and tie back the TDS entries in TRACES Form 16A to the TDS reflecting in Form 26AS.
How to Fill Form 16A?
Form 16A is provided by the Tax deductor to the recipient of income i.e. deductee. The Form 16A format may be downloaded from the Income Tax Website and filled in as follows -
- Provide Name and address of the Deductor and Deductee
- Fill the PAN and TAN of deductor, PAN of deductee
- Specify the period of tax deduction i.e. Assessment Year and quarter
- Input the amount paid, nature of payment and date of payment to the deductee
- Input the details of tax deducted and remitted
- Provide Bank challan-wise details of tax deposited on behalf of the deductee
- Furnish any other details as required
Sign and issue Form 16A to the deductee within 15 days from the date of filing TDS Returns for the quarter.
What payments is Form 16A issued for?
The payments for which Form 16A would be applicable can be narrowed down by the process of elimination. This means Form 16A would be issued for all payments other than those specified below.
Form 16A will not be applicable for the following types of payment-
- Salary (Sec.192)
- Sale of Immovable Property (Sec. 194-IA)
- Property rental (Sec. 194-IB)
Form 16A: TDS Rates for applicable payments
S.No |
Section No. |
Payment Type |
TDS Rate |
Tax Exemption Limit |
1 |
192A |
Payout from premature withdrawal from EPF |
10% * |
If payment is less than Rs. 50,000 |
2 |
194 |
Dividend payout |
10% |
Up to Rs. 2,500 in a FY (Individual) |
3 |
194DA |
Life Insurance policy payout |
1% |
If payment is less than Rs. 1 Lakh |
4 |
194F |
Repurchase of units by Mutual Fund or Unit Trust of India |
20% |
Not applicable |
5 |
194J |
Professional or Technical service fee payout |
10% ** |
Up to Rs. 30,000 during the FY (this limit applies for each type of payment) |
(*) 20% if PAN is not provided
(**) 2% if payment is made to a Call Centre Business
Also read - PF Fund withdrawal Form
Conclusion
We have now covered what Form 16A is, when it is issued, why it is important where it is to be used. TRACES Form 16A can be easily downloaded online from the Income Tax website. This tax deduction (TDS) certificate will prove a helpful tool to enable quicker and accurate filing of your annual Income Tax return.
If you are looking for safe investment option, then you can consider investing Bajaj Finance Fixed Deposit. With a top-tier AAA rating from financial agencies like CRISIL and ICRA, they offer one of the highest returns, up to 8.65% p.a.
