Form 16 and Form 16A both are TDS Certificates. They are the proofs of tax deduction at source provided by the deductor. Both certificates are essential documents to file ITR. This article explains the difference between both the TDS certificates.
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Difference Between Form 16 and Form 16A
| Form 16 | Form 16A |
| It is a Certificate of TDS on Salary Income. | It is a Certificate of TDS on Income other than Salary. |
| Form 16 is applicable to Salary Income earned by an individual. | Form 16A is applicable to income such as interest, dividends, commission, professional charges, rent, etc. |
| Employer issues Form 16 to an employee. | Deductor (Payer) issues Form 16A to a deductee (Payee). |
| It is issued on an annual basis. | It is issued on a quarterly basis. |
| When your income from salary exceeds Rs. 2,50,000 employer is required to deduct TDS and issue Form 16. | When your income (other than salary) exceeds a certain threshold, a payer is required to deduct TDS from payments and issue Form 16A. |
| Form 16 certificate has two parts- Part A and Part B. Part A contain information of TDS deducted. Whereas Part B includes details of salary paid, other incomes. | Form 16A certificate has only one part. It contains details of Deductor and Deductee, Nature of Payment, Amount Paid, TDS, and Challan details. |
| You can easily file your Income Tax Return annually using Form 16. | It can be used to file an income tax return. Form 16A will provide TDS deduction details from a different source of incomes. |
You will also find TDS details in Form 26AS Tax Credit statement. You can also figure out TDS on salary from your salary slips. If there are any discrepancies you can contact your Employer/ Deductor to make corrections. Deductors can download Form 16 and Form 16A from TRACES.
FAQs
Employer issues Form 16 after the end of the financial year. The due date is 15th June of the next financial year.
Form 16A is issued by the deductor/payer after the end of the quarter in which TDS was deducted. The due date is 15 days from the date of filing of TDS return by the deductor.
Yes, you can file ITR even without Form 16. All you need to do is calculate your taxable salary based on salary slips while filing ITR.
Hey @TeamQuicko
Thanks for the blog! Just one quick question - Why do we have to report a quarterly breakdown of Dividend Income under IFOS?
Thank you!
Hey @TanyaChopra
This quarterly breakdown of Dividend Income under IFOS will help to calculate and determine penalty u/s 234C for the delay in payment of Advance Tax.
Hope this helps!
I had received dividend recently but I had noticed that TDS had been deducted. any idea as to why has it happened and is there a way I can claim this TDS?
Hey @HarshitShah
After the introduction of Budget 2020, dividend income is now taxable in the hands of the shareholder; and is also subject to TDS at 10% in excess of INR 5000 u/s 194 & 194K. Foreign Dividend is taxable at slab rates. TDS is not applicable to such dividends. The taxpayer should report such income under the head IFOS in the ITR filed on the Income Tax Website.
Hope this helps!
Hey @HarishMehta
Yes, dividend income is now taxable from FY 2021-22 onwards and it has to be reported under the head of IFOS.
You can read more about it here:
Hi @Maulik_Padh,
You need to pay Income tax on the net taxable income, i.e. after subtracting deductions, expenses, etc.
If the net taxable income is negative i.e. if there is loss, you can carry it forward when filing the ITR
Here are some of the articles which might help
Hi @ameyj
The amount of TDS deducted shall reflect in your Form 26AS only and it will also reflect the name of the deductor.
Using the name of the deductor you can find out on which share you have received the dividend and you can also cross-check the same in your bank statement.
Yes, you are right, TDS is to be deducted when the dividend paid exceeds 5000 INR in a financial year. However, the 5,000 INR limit pertains to all the dividends an individual gets in a year, or the total dividend per shareholder that a company pays out in a year, is left to interpretation, and hence registrars and share transfer agents (RTA) are not taking any chances and are deducting TDS even on small amounts.
Hope this helps
Hi @ameyj
You can submit a grievance on Income Tax Portal mentioning the issue and also attach the 26AS.
The other option is to leave it as it is and clarify it when the tax department sends the notice.
Hi @TeamQuicko
Consider that I have 10 shares each of 10 different Indian companies. Each of the 10 companies are declaring a dividend of INR 100 before the FY ends. Now I will be recieving 1000 as dividend from each company, thereby a total of 10,000.
The 5,000 dividend limit, is it applicable to each company / total dividend recieved by me in a year. If it is applicable to each company, then I would not attract TDS of 10% for dividend.
Also pl clarify, how would the company B know that I have got shares of Company A,C,D,E so on…
@Saad_C @Laxmi_Navlani @Divya_Singhvi @Kaushal_Soni @AkashJhaveri can you help with this?