A large number of tax payers are inhibited by these two forms they see only once a year. This article takes the jargon out of them for both the experienced and a new tax filer.
Soon the tax filing season for AY 2015-16 will be upon us. If you are a salaried individual, Form 16 is a vital document to get to file your income tax return. Another important document is your Form 16A. When you are armed with these two types of forms, your return filing will be a breeze. Let’s de-jargon these two forms and understand them in greater detail.
If tax has been deducted at source from salary paid to you, your employer will certify the details of tax deducted at source (TDS) & deposited by them in Form 16. Form 16 is your Salary TDS Certificate. If your total income is Rs 2,50,000 or less, the employer does not have to deduct TDS and therefore, a Form 16 may not be issued to you by the employer. If you have worked with more than one employer during the year, you will have more than one Form 16.
Form 16 consists of two parts, Part A and Part B. Lets first understand Part B since it is an important summary of the salary paid to you. The components of your salary and deductions claimed by you are specified in this part. Your total taxable income is mentioned, based on what the employer paid you and any other income that you may have disclosed to your employer are also included. You will be able to spot the amounts you have claimed for various sections such as 80C (deposits to Public Provident Fund, purchase of National Saving Certificates, life insurance premium etc). If you have claimed any other deduction such as 80D for health insurance or made donations which can be claimed under section 80G those are also mentioned. This is an exhaustive document of information related to your salary & deductions which you can use to fill your return.
Part A consists of TAN of the employer, PAN of the employer as well as the employee. It includes name and address of both. It also mentions the assessment year for which salary has been paid. Note that assessment year is 2015-16 for financial year 2014-15. Most importantly, Part A lists a summary of TDS deducted and deposited to the government. These TDS details are also mentioned in the quarterly TDS return filed by your employer.
You may review the details of the TDS deducted against your Form 26AS or even your pay slips. If there is any discrepancy you can reach out to your employer to make corrections.
Form 16A is also a TDS Certificate. Form 16 is for salary income, whereas Form 16A is applicable for TDS on Income Other than Salary. Banks issue a Form 16A when TDS is deducted by them on interest earned by you in fixed deposits. If you are a freelancer, your clients will issue you form 16A if they have made TDS deductions from payments they make to you. Form 16A is also issued for TDS deductions on insurance commission paid. This certificate also has details of name & address of deductor/deductee, PAN/TAN details, and details of TDS deducted & deposited. The income on which TDS is deducted is also specified.
Why is there tax payable in my return if Form 16 and Form 16A has been received by me?
Usually your employer deducts TDS on the basis of slab applicable to you while other deductors do not have information about your total income and usually deduct TDS @ 10%. It’s possible a higher slab rate may be applicable to you when you include income other than salary in your return. It is also possible that TDS deducted by another deductor is not sufficient and there is a tax due in your return. So there may be a tax payable in your return beyond the deductions shown under Form 16 and 16A.
If I have received Form 16 and Form 16A, do I have to file an income tax return?
The income tax department requires that a return of income must be submitted where your gross total income exceeds Rs 2,50,000 in the financial year. Therefore, even though TDS may have been fully deducted from your income, Form 16 may or may not have been issued; you must file an income tax return if your income exceeds the specified limit.
Author is chartered accountant and chief editor at Cleartax.
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