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What are Form 16, 16A, 16B, 26AS, 27A, 27B & how are they different?

Form 16 sumopayroll

Basically, these forms are TDS certificates, with the following differences

Form 16

  • Form 16 is issued by the Employer to Employee.
  • Issued annually before 15th June.
  • Want to check what form16 looks like?
  • Salaried individuals with regular income will receive Form 16 from their employer.
  • This form Is generally issued for employees who exceed the threshold of the annual income and is liable for TDS, Form 16 is the certificate of deduction of tax deducted at source (TDS) and issued on deduction of tax by the employer on behalf of the employees.
  • These certificates provide details of TDS for salaries paid.
  • It is mandatory for all employers to issue these certificates to Taxpayers.
  • This applies to dividends earned & interest on securities also
  • You can look at Form 16 for
    • Income proof
    • Employer’s TAN
    • Employee’s PAN
    • TAX amount of TDS deducted in a fiscal year.
    • Payment acknowledgment with Surcharge & Education Cess
  • The Income Tax ACT under section 203 is the abiding law for TDS on chargeable income.
  • Form 26AS reflects only the TDS details mentioned in Form 16.
  • Can be verified online in the traces to check if the deductions by the employer are reflected in Form 26AS.

Benefits with SumoPayroll

  • The employer can generate form 16 within the Sumopayroll application under payroll forms, you need to stamp & sign it before sharing it with your employees.
  • Even zero-taxed employee form 16 is generated

Form 16A

  • Form 16A is the certificate of deduction of TDS for non-salary earnings like commissions, rents, & freelancing consultancy
  • These certificates provide details of TDS for self-employed, consultants, and other professionals
  • It is mandatory to issue these certificates to Taxpayers.
  • Non Salaried individuals like freelancers, consultants & commission agents are eligible to receive Form 16A
  • Issued by the deductors
  • Issued quarterly
  • This applies to commissions earned, rental income & professional charges
  • You can look at Form 16A for
    • Deductor’s Bank BSR Code & TAN (Employer’s Tax number)
    • Tax Payer’s PAN (Employee’s PAN)
    • TAX amount (TDS amount deducted in that year)
    • TDS Payment acknowledgment
    • Income Tax ACT under section 203 is the abiding law for TDS on earned income
  • Payments above Rs. 20,000 are liable for TDS & cannot claim deductions
  • Form 26AS reflects all details mentioned in Form 16
  • Easily, taxpayers can verify online in the traces whether the deductions made by the employer or tax deductor align with the deductions reflected in Form 26AS.

It is now evident that both forms 16 & 16A as mentioned above are vital for taxpayers. They provide crucial information & are immensely helpful in understanding the rate of TDS & the amount deducted. One should also know how to deal with any discrepancies that arise for a smooth tax filing.

Form 16B?

  • It is a TDS certificate issued for the sale of immovable property other than agricultural land, issued by the buyer to the seller.
  • It is neither related to the employee nor the employer. The employer cannot issue 16B, as it is a non-payroll transaction.

What is Form 26AS?

  • It is a statement provided by the Income Tax Department for each individual with PAN.
  • The taxpayer is known as Assessee.
  • It is an annual statement that contains tax-related information of an Assessee such as
    • The tax deducted at source by the deductors
    • The tax collected at source by the collectors
    • Advance tax paid (If any)
    • Self-assessed tax payments
    • Details of the refund received along with interest acquired(If any)
    • Details of high-value transactions like income such as trading in shares, mutual funds, dividends earned, and sale of property
    • Moreover, the account holder/assessee submits Form 15G/H to the Bank. As a result, Banks do not deduct TDS on the interest received.
    • Furthermore, information from 24Q submitted by the employer is related to the TDS on an employee’s salary. In contrast, the employer submits data from 26Q related to the TDS of a non-salaried consultant or a freelancer.
    • An employee can download Form 26AS from traces by logging in with his credentials at the Income Tax Website

Form 27A?

  • It is a form available from the Income Tax Department and generally can be downloaded from the website too.
  • The employer shall furnish the information with a statement of deducted TDS for a particular financial & assessment year.
  • It is mandatory to fill & submit form 27A by the employer.

What is Form 27B?

  • The tax collector (seller) shall furnish the information with a statement of Tax Collected at Source for a certain period ending by or a fiscal year. Besides, Taxpayers can download this form directly from the Income Tax Department’s website.
  • It is mandatory to fill & submit form 27B by the tax collector (A seller selling any tangible products above the sum total of Rs. 50,00,000 in a financial year to a particular buyer)
  • It is neither related to the employee nor the employer. The employer cannot issue 27B, as it is a non-payroll transaction.

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