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 how form16looks 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.
- Applies to dividend 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
- Income Tax ACT under section 203 is the abiding law for TDS on chargeable income
- Form 26AS reflects only 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 before sharing it with your employees.
- Even zero taxed employee’s 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
- 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
- Can be verified online in the traces to check if the deductions by the employer or tax deductor are reflected in form 26AS
- Income proof
- Employer’s TAN
- Employee’s PAN
- TAX amount of TDS deducted in a fiscal year.
- Payment acknowledgment with Surcharge & Education Cess
- 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
It is now evident that both forms 16 & 16A as mentioned above are vital for taxpayers. They provide crucial information & are immensely helpful to 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.
What is 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
- Interests received from Banks where TDS has not been deducted because form 15G/H is submitted to the Bank by the account holder / Assessee
- Information from 24Q submitted by the employer. Related to the TDS on the salary of an employee
- Information from 26Q submitted by the employer. 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
What is Form 27A?
- It is a form available with the Income Tax Department, 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?
- It is a form available with the Income Tax Department, generally can be downloaded from the website too, the tax collector (seller) shall furnish the information with a statement of collected Tax Collected at Source for a certain period ending by or a fiscal year.
- 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.