Form 16A: Definition, Purpose, How to Download and Fill Form 16A, Format, and Types of Payments Covered in India’s TDS Certificate

Form 16A is a vital document under the Income Tax Act of India. It is related to the tax deduction at source(TDS) or income other than salary. Unlike Form 16, which is issued to salaried employees, Form 16A is issued to the one or entities who received income such as interest, dividends, rent, commission or any other payment. It is a TDC certificate and contains important information about the tax deducted at source. It allows the taxpayers to aim for credit for the TDS while filing the income tax return.

Let’s take an example to understand it- Assume you earned some income from the lottery or card games worth Rs 50000. According to Sec 194B, you must pay the government a TDS of 30%. So, in cash, you will get the 35000. Rest 15000 is the amount of tax which will be reflected in your Form 16A.

 

 

Purpose of Form 16A:

The primary purpose of Form 16A is to provide details of tax deducted at source(TDS) on income other than salary. The deductor (the entity responsible for deducting TDS) issues Form 16A as a certificate of TDS for the deductee (the individual or entity from whose income TDS has been deducted). This document serves as evidence of the deducted TDS. However, form 16A enables the deductee to claim the TDS amount at the time of filing their income tax return means it reduces their tax liability.

 

 

What is the Format of Form 16A?

The Income Tax Department of India standardizes the format of Form 16A. The deductor fills out many fields on the form before issuing it to the deductee. Here is the detail of the format of Form 16A.

1. Title: There is a heading stating that “Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source”
2. Name and Address of the Deductor: Name of the deductor (individual, company, firm, etc.), Address of the deductor (including city, state, and PIN code)
3. Permanent Account Number (PAN) of the Deductor
4. Name and Address of the Deductee: Name of the deductee (individual or entity from whose income tax has been deducted), Address of the deductee (including city, state, and PIN code)
5. Permanent Account Number (PAN) of the Deductee
6. TAN (Tax Deduction and Collection Account Number) of the Deductor
7. Details of TDS Deducted

• Assessment Year: You need to enter the financial year for which TDS has been deducted
• TDS Certificate Number: A Unique identification number assigned to the Form 16A
• Date of Payment/Credit: Payment Date on which you made or credited to the deductee
• Amount Paid/Credited: Total amount paid or credited to the deductee
• Tax Deducted at Source (TDS): Amount of tax deducted at source

8. Nature of Payment: Type of income on which TDS has been deducted like interest, dividends, rent, commission
9. Rate of TDS: Percentage rate at which TDS has been deducted
10. Challan Serial Number: Serial number of the challan used for depositing TDS with the government
11. BSR Code of the Bank Branch: Bank and branch code where the TDS amount was deposited
12. Date of Deposit: The date on which the TDS amount was deposited with the bank
13. Date of Issue: The date on which the Form 16A is issued by the deductor
14. Signature of the Deductor: Signature of the authorized signatory of the deductor

Name and Designation of the Deductor: Name and designation of the authorized signatory of 15. the deductor

Types Of Payment Consider Under Form 16A

Under Form 16A, various types of payment attract Tax Deducted at Source (TDS) as per the provisions of the Income Tax Act, 1961.

• Interest Income: Interest earned is considered under Form 16A like Interest earned on fixed deposits, savings accounts, recurring deposits, bonds, debentures, and other financial sources.
• Dividend Income: Dividend received from the shares, mutual funds, or other investments.
• Rent Payment: Rent paid on the building, plant, machinery, equipment, or any other property.
• Commission Payment: Commission earned by agents, brokers, dealers, or any other source.
• Professional Fees: Professional fees for doctors, lawyers, architects, consultants, or any other service provider.
• Contract Payment: Payment earned by contractual agreements for services rendered, work done, or goods supplied 
• Royalty Payment: Payments from the patents, copyrights, trademarks, or any other intangible assets
• Insurance Commission: Commission earned by insurance agents or brokers on insurance policies 
• Interest on Securities: Like government bonds, debentures, or other securities
• Lotteries and Gambling: Winnings from lotteries, crossword puzzles, card games, or any other games.

How to Download and Fill Form 16A?

The deductor deducts TDS from the payment, then you are eligible for Form 16A. After deducting TDS, you need to fill out the Form 16A form. You can download it from the Income Tax’s official website under the Traces section. After downloading the Form 16 form, fill out the form-

• Enter the name and address of the deductor and deductee
• PAN of the deductor and deductee.
• TDS Certificate Number
• Details of TDS deducted like amount, date, etc
• Challan details like challan number, bank and branch details, etc.
• Date of issue of Form 16A.
• Verify all the details and authenticate the form by the signature of the authorized signatory of the deductor.
• Carefully check all the details.
• After successfully filling Form 16A, the deductor issues it to the deductee within the prescribed time frame. Later, the deductee used this Form 16A as documentary evidence of TDS deducted at the time of income tax return filing.

It is good to retain a copy of Form 16A by both the parties, the deductor and the deductee for future use. Form 16A serves as proof of TDS deduction and can be used anytime in future.

 

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