Form 16, Form 16A, Form 16B Explained: A Complete Income Tax Guide

As an investor, you must be looking for the best tax savings options in India that can help you earn returns on your savings while reducing your tax burden. But when it comes to filing the tax document, it is different for salaried and self-employed. At the same time, knowing about TDS and TCS is also important. 

But for salaried people, Form 16, Form 16A, and Form 16B are required. While each of these forms serves a different purpose, knowing when to use which is quite important. Also, using these forms properly will help you understand your tax deductions better. 

So, let us explore what these forms are and how you can download them in the guide over here.

What Is Form 16?

Form 16 is a TDS certificate. It is issued by an employer to a salaried employee. It shows the salary you earned during the financial year and the amount of tax deducted from it. Through this form, you can find your gross and net salary.

The form also includes details of exemptions, deductions, and any tax already paid. These details will be linked to your PAN number for easy analysis.  When you file your income tax return, Form 16 works as proof of your total income from salary and the tax paid on your behalf.

Form 16 has two parts, and both are important while filing taxes.

Part A of Form 16

Part A contains your PAN, employer’s TAN, employment period, total salary paid, and TDS deducted each quarter. It confirms the tax deposited by the employer with the government.

Part B of Form 16

Part B includes the detailed salary structure for tax calculation. It includes basic salary, allowances like dearness allowance, exemptions, deductions under Chapter VI A, taxable income, and final tax computation.

How to Download Form 16

Employees cannot download Form 16 directly from the income tax portal. This is the form that can be shared with the employee by the employer only. The simple steps on how to download Form 16 are as follows:

1. Ask your HR or payroll team for the latest Form 16.

2. Employers download it from the TRACES portal ro share with employees by email or through the office HR system.

3. Once received, you can save the PDF and use it while filing your income tax return.

If you cannot find it, request a reissue of the income tax Form 16 from your employer.

What Is Form 16A?

Form 16A is a TDS certificate issued for non-salary payments. It is given by banks, companies, clients, or any deductor. These are the institutions or people who pay you and deduct tax at source. 

This applies to interest income, professional fees, rent, commission, and other similar payments. These are the incomes that can fall into your salary or savings accounts alike. The form shows how much was paid to you and how much tax was deducted. 

You need it while filing your income tax return to report your non-salary income correctly.

How to Download Form 16A

You cannot download Form 16A yourself. The deductor who paid you must generate it from the TRACES portal. So, if you are looking for how to download Form 16A, here are the simple steps to know:

1. Ask the bank, company, or client to provide your Form 16A.

2. They will download it from TRACES and send it to you as a PDF.

3. Save it to use while filing your income tax return.

What Is Form 16B?

Form 16B is a TDS certificate issued when you buy a property. The buyer deducts TDS from the payment made to the seller. After that, Form 16B is issued to the seller as proof of this deduction. 

It applies when the property value is more than Rs. 50 lakh. The form records the buyer's details, seller's details, property value, and the TDS paid to the government. 

How to Download Form 16B

Form 16B is downloaded by the buyer from the TRACES portal. Here is the simple process of how to download Form 16B:

1. Buyer logs in to the TRACES portal using their PAN details.

2. Select Form 16B under the TDS on property section.

3. After the TDS payment is processed, the form becomes available for download.

4. Downloads the PDF for the seller.

The seller should keep Form 16B as proof that the TDS on the property transaction was paid correctly.

Difference Between Form 16A and 16B

Form 16A and Form 16B are both TDS certificates. But it is important to note that each of these applies to different payments. One is for the non-salary income that you earn, while the other is for the property transactions. The difference is below:

Conclusion

Form 16, Form 16A, and Form 16B give you a clear picture of how tax has been deducted from your income. Each form serves a different purpose. But if you are earning a salary or earning from property sale, then these serve as proof of the transaction and the tax paid.

Understanding these forms is quite important. By doing so, you can complete the income tax filing quickly with high accuracy. For more simple tax guides and investing help, explore detailed resources on Rupeezy.

FAQs

What is Form 16 used for?

Form 16 is a TDS certificate for salaried employees. It shows salary earned, tax deducted, and all deductions claimed during the financial year.

Can I download Form 16 myself?

No. Employees cannot download it directly. Only the employer can generate Form 16 from the TRACES portal.

How is Form 16A different from Form 16?

Form 16 shows TDS on salary income. Form 16A shows TDS on non-salary income such as interest, professional fees, rent, or commission. Both forms have different uses.

Who can download Form 16B?

Only the buyer of a property can download Form 16B from the TRACES portal. The buyer must then give it to the seller as proof of TDS deducted.

Is Form 16 mandatory to file income tax returns?

It is not compulsory, but it is very helpful. If you do not have it, you can still file your return using your salary slips, Form 26AS, and AIS information.