As per the Income Tax Act 1961 A person making payment to other person upon a threshold limit need to deduct tax. In case of Employer making payment to his Employee in a term of Salary. Employer gives the details of salary in form 16 his total salary paid and credited to his account in form 16A.
Form 16 is also called as salary certificate given by Employer to his Employee irrespective of his income for the year. Form 16 is provide on annual basis or part there of as per the situation. Form 16 Contains all Details of Salary like Basic Salary Dearness Allowance house Rent Allowances and other allowances which is part of salary details of Perquisites and Deduction from salary under Chapter VI A like provident Fund life insurance Premium Mediclaim Donations etc. whereas Form 16 A is Aggregate of salary paid/ Credited to his Account and tax deducted thereon. Form 16A is downloaded from Traces. The Information in form 16A is similar to form 26 of employee which can be downloaded from employee Income Tax login.
Some contains of Form 16 Part A and Part B
1. Part A contains
- Name and address of the employer
- Name and address of the employee
- Permanent Account Number (PAN) or Aadhaar number of the employer and employee
- Tax Deduction Account Number (TAN) of the deductor
- Assessment year on which tax is deducted or paid
- Period of employment
- Details of TDS deducted and deposited with the government.
- Part A is generated and downloaded through the TRACES portal.
2. Part B Contains
- Detailed breakup of salary paid
- Any other income reported to the employer other than salary
- Allowance to the extent exempt under section 10
- Deductions allowed under Chapter VI-A of the Income Tax Act
- Relief under section 89
- Tax payable
** If employee worked more than one Employer in a year then each of his employee issues form 16 for a term employee worked with organisation.
FORM 16 B
- Form 16B is the TDS certificate issued against the income earned on the sale or transfer of immovable property.
- Under Section 194-IA of the Income Tax Act, immovable property refers to a building, a part of a building, and land (other than agricultural land) whose value is INR 50 lakhs or more.
- The buyer is supposed to deduct the TDS at the rate of 1% against the PAN of the seller and deposit the tax within 30 days from month end.
- However, if the seller doesn’t provide PAN, TDS at the rate of 20% is to be deducted.
- TDS is supposed to be reported in return-cum-challan Form 26QB within 30 days from the end of the month in which such payment is made.
- The buyer has to issue Form 16B to the payee within 15 days calculated from the due date of furnishing Form 26QB.
- Property buyers do not require a TAN and can only furnish PAN.
- The components of Form 16B
- Name and address of the deductor (transferee/payer/buyer)
- Name and address of the deductee (transferor/payee/seller)
- PAN or Aadhaar number of the deductor and the deductee
- Financial Year of the deduction o Acknowledgment Number of Form 26QB Details of tax deposited
- Form 16B can be downloaded from TRACES.