Form 16D is a TDS Certificate issued by a Payer for payment of a commission, brokerage, contractual fee, the professional fee under section 194M. It contains details of the nature of payment and TDS deducted on it. Section 194M has been applicable from the 1st of September 2019. Thus, Form 16D can be downloaded from FY 2019-20 onwards. The taxpayer can download Form 16 from the TRACES portal.
As per the section, if the payments to resident contractors and professionals exceeding INR 50,00,000 Lakhs during the Financial Year, the payer/deductor has to deduct tax at the rate of 5% from the sum payable to a resident payee/deductee.
As per the Central Board of Direct Taxes (CBDT) notification, the due date of payment of TDS on payments to resident contractors and professionals is within a period of thirty days from the end of the month in which the payment has been made. Hence, Form 16D has to be issued 15 days from the date of issuance of Form 26QD.
For example, A professional payment of INR 65 Lakhs has been made in the Financial Year 2019-2020. The payment is made on the 15th of August. Hence, the tax deducted must be deposited with the government and Form 26QD should be filed on or before the 30th of September. Furthermore, the deductor should also issue the Form 16D TDS certificate by October 15.
Sample Form 16D
Details of Form 16D
Name and address of Deductor and Deductee
PAN/Aadhaar number of the Deductor and Deductee
Financial Year of Deduction
Details of Tax Deposited
Challan Identification Number
Who is responsible to deduct the TDS on payments to resident contractors and professionals under section 194M?
The Payer/Deductor being an Individual or a HUF (not liable to tax audit u/s 44AB) would have to deduct the TDS at the rate of 5% and deposit the same with the government by filing Form 26QD.
What is Form 26QD?
The Form 26QD is the challan-cum-statement for reporting the transactions liable to TDS on payments to resident contractors and professionals under section 194M of the Income-tax Act, 1961.
Is Form 16D different from Form 16A?
Form 16D is the TDS Certificate issued by a taxpayer i.e. payer to the deductee i.e. payee with details of nature of payment and TDS deducted on it u/s 194m. Form 16A is the TDS Certificate issued by a deductor for non-salary payments like professional fees, brokerage, commission, interest, rent, contractual payment, etc. It contains details of the nature of payment and TDS deducted on it.
What is the due date of payment of TDS deducted on the payment made to the resident contractors and professionals u/s 194M?
The due date of payment of TDS on payment made to the resident contractors and professionals is within a period of thirty days from the end of the month in which the payment has been made. Moreover, the Form 16D has to be issued within 15 days from the date of issuance of Form 26QD.
What is the fee in Form 26QD and when is it applicable?
As per section 234E of the Income-tax Act, 1961 read with Rule 31A (4B) of Income-tax Rules, 1962, failure on part of deductor (Payer/Deductor) to furnish challan-cum-statement in Form 26QD electronically within 30 days from the end of the month in which the tax deduction is made will attract levy of fee for default in furnishing statement at the rate of INR 200 for every day to be paid by the deductor (Payer/Deductor).
Every person deducting tax at source is required as per Section 203 to furnish a certificate to the payee to the effect that tax has been deducted along with certain other particulars. This certificate is usually called the TDS certificate. Hence, it is important to verify the validity of the TDS certificate. An individual receives 4 types of TDS certificates in a financial year. They are as Form 16, 16A, 16B, and 16C.
While a Deductor can download TDS Certificate from TRACES, the Deductee can verify the details of the TDS Certificate from TRACES. It is important to understand how this entire process works.
Navigate to the “My Account” drop-down list on the dashboard and select the “View Form 26AS” Option.
Click on the “Confirm” to move to the TRACES portal.
Agree and Proceed
Agree to the terms by clicking on the check-box and click on the “Proceed” option when the pop-up appears.
Select the “Verify TDS Certificate” Option
From the “View/Verify Tax Credit” drop-down list on the dashboard select the “Verify TDS Certificate” option
Fill in the details
Thus, we move to the verification page of the TDS Certificate. Enter the following details in their respective fields: – TAN of Deductor – TDS Certificate Number – Assessment Year – Source of Income – TDS Amount Deducted as per the Certificate (INR)
Click on the “Validate” option.
Hence, once the required details have been entered, click on “Validate” If the TDS certificate received by you is valid, then the website will show the same result. However, if the website shows that the TDS certificate is not valid, then you must contact the tax deductor and ask for a valid TDS Certificate.
I have not received a TDS certificate from the deductor. Can I claim TDS in my return of income?
Yes, the tax credit, in this case, will be reflected in your Form 26AS and, hence, you can check Form 26AS and claim the credit of the tax accordingly. However, the claim of TDS to be made in your return of income should be strict as per the TDS credit being reflected in Form 26AS. If there is any discrepancy in the tax actually deducted and the tax credit being reflected in Form 26AS, then you should intimate the same to the deductor and should reconcile the difference. The credit granted by the Income-tax Department will be as per Form 26AS.
How can I know if my deductor has actually deposited TDS with the government and filed a TDS Return or not?
The Income Tax Department has prescribed different ITR Forms for various income situations. The taxpayer is required to prepare and file the ITR Form applicable to them for that particular financial year.
Form 16 is a TDS certificate on Salary. It contains details of income earned and taxes deducted on it. The employer issues Form 16 to its employee after the end of a financial year. The due date to issue Form 16 for FY 2018-19 is 15th June 2019. Form 16 is divided into 2 Parts:
Part A: contains employer, employee details and TDS deducted by the employer
Part B: is an annexure of income chargeable under the head of ‘Salary’. It contains a detailed breakdown of salary components.
You may have multiple Form 16 if you had multiple employers or changed jobs during the Financial Year.
Form 16A is a certificate on TDS income other than Salary, like commission, interest, professional fees, rent. Form 16A is issued by the deductor(Payer) to the deductee(Payee) within 15 days of from the date of filing the TDS return.
Form 26AS is a consolidated Tax Credit Statement. It contains the following details:
Tax Deducted from the taxpayer’s income
Tax Collected from taxpayer’s payments
Taxes paid during the financial year: Advance Tax, Self-Assessment Tax, Regular Assessment Taxes paid by the taxpayer
Details of Tax Refund received during the financial year
Details of any high-value transactions
You can set off the tax credit against your net taxable liability while filing the ITR.
You can view and download your Form 26AS from your account on the income tax e-filing website.
Form 12BB is an investment declaration form submitted by an employee to its employer. The employer uses this Form 12BB for accurate TDS deduction on the employee’s salary, and avoid excessive TDS deduction.
Form 10BA is for taxpayers to claim deduction u/s 80GG i.e. for rent paid on house property. Form 10BA contains details of the taxpayer, property, rent paid and the landlord.
How to submit Form 10BA?
You can submit Form10BA for a financial year using the Income Tax Department website.
Go to Income Tax Forms under e-file on the Income Tax Website
Select Form 10BA from the drop-down
Choose the submission mode- Prepare and Submit online
Enter the relevant details,
Preview and Submit the Form 10BA
Form 15G & Form 15H
Form 15G & Form 15H is to avoid TDS deduction on the taxpayer’s income. It is usually submitted to banks to avoid TDS being deducted on the interest income. Form 15G & Form 15H is required to be at the beginning of the financial year.
Form 15H is for taxpayer above the age of 60 years i.e. senior citizens. Whereas, non-senior citizens use Form 15G.
When to submit Form 15G/15H?
Form 15G/15H can be submitted to avoid tax deduction in the following income sources:
TDS on EPF withdrawal
TDS on Rent
TDS on the interest income from Fixed Deposits with bank/ post office
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.
Form 16A is a certificate of TDS on Income other than Salary. When TDS is deducted from the payments like a commission, contract, professional fees, rent, interest, etc., Form 16A is issued.
It is issued by the deductor to the deductee. Deductor (Payer) is a person who makes a payment and deducts TDS. And Deductee (Payee) is a person whose TDS is deducted. Deductor is responsible to issue Form 16A to the deductee within 15 days from the date of filing the TDS Return.
Nature of the Payment, Amount Paid, and the Date of Payment.
TDS challan details.
It is the deductor’s responsibility to provide the Form 16A to deductee as a proof of tax deduction. If you have not received the Form, you can check your Form 26AS for TDS credit. The deductor can download Form 16A from his account on TRACES.
What if a person deducts TDS from my income and doesn’t provide me with Form 16A?
If a person doesn’t provide you with Form 16A, no need to worry. You can always download Form 26AS (Tax credit statement) from your the income tax e-Filing account. And check credit of TDS deducted by a payer.
Is there a way to download Form 16A online?
Deductor can download Form 16A from his account on TRACES. However, a payee can not download Form 16A from TRACES.
Do I have to keep all the Form 16A on record?
It is always a good practice keeping all TDS Certificates with you. However, Form 26AS contains the same details so even if you have not received all Form 16A, you need not worry.
The major change in Form 16 with respect to the new regime is in Part B of Form 16 where section A (the first line of Form 16) asks ‘Whether opting for taxation u/s 115 BAC?’ to which there are options of selecting ‘Yes’ or ‘No’.
What is Form 16?
It is a certificate of TDS on a salary that contains details of income earned and the taxes deducted. It is divided into two parts: Part-A and Part-B. The employer can download Form 16 Part A and Part B from their account on TRACES.
Tax details: Tax deducted and deposited on the employee’s behalf
Sample Form 16 – Part A
Form 16 – Part B
Part-B is an annexure containing details of Income Chargeable under the head of ‘Salary’. Salary breakdown includes allowances, perquisites, bonus, income tax deductions, Taxable Income, Taxes, and TDS. From FY 2018-19 Part-B should be issued in a standardized format.
Gross salary is the employee’s total remuneration. It includes basic salary, allowances, overtime, bonus and any other amounts before any deduction made.
It is the predefined fixed pay that an employee receives each month. It also includes compensation like gratuity, pension, advance salary, commission, etc.
These are additional benefits provided by the employer like rent-free accommodation, concession in rent, etc. It also includes expenses incurred by the employer on behalf of the employee like medical, education, etc.
The amount received from a current employer or former employer in connection with their termination like a bonus, etc.
Salary from the other employer(s)
The current employer will include your salary from the previous employer in the Gross Salary. It the case usually when, the employee switched jobs or have multiple employers during the financial year.
Allowances u/s 10
Additional compensation received by employees over and above their salary is Allowances. Employers give allowances to their employees to help them meet certain particular requirements. Some of the common allowances include:
For employees to cover their accommodation expenses. Salaried individuals who live in rental premises can claim tax benefits for the amount of rent they pay every year
For employees covered under the Gratuity Act, 1972. There is a predefined formula to calculate the amount that is tax-exempt
Commuted Value of Pension
For government employees and other employees who receive a commuted pension from the employer.
The cash equivalent of leave salary encashment is a retirement benefit for employees. There is a predefined formula to calculate the amount that is tax-exempt.
Deductions u/s 16
Tax deductions are deductible from taxable income (adjusted gross income). An employee is eligible to claim these deductions based on the investments made and expenses incurred during the year. These deductions help reduce the overall tax liability. Some of the most commonly used deductions u/s 16 are:
It is a flat deduction from the salary. No proof is required to claim the standard deduction. The standard deduction allowed for FY 2018-19 is INR 40,000 and FY 2019-20 is INR 50,000.
It is exempt only for government employees. Entertainment Allowance up to Rs. 5,000 is allowed.
Also known as professional tax. An employer pays it on behalf of the employee to the state government. It ranges from INR 2,400 to INR 2,500.
Total Income from Salary
Total Taxable Salary is after deducting the allowances u/s 10 and claiming deductions u/s 16.
Tax Payable: Tax calculated at Slab Rate on Net Income. Surcharge and Health & Education Cess is levied on it. Rebate u/s 87A and Relief u/s 89 are given based on total income earned by an employee.
Which ITR should I file if I have multiple Form 16?
You can file ITR-1. Any individual who earns only salary income can file ITR-1.
What if my employer has not provided me with a Form-16?
If your employer has not provided you with a Form 16, no need to worry. You can always download Form 26AS from the income tax e-Filing website to check TDS credit. And you can use salary slips to determine taxable salary income.
How to download Form-16 online?
A salaried individual cannot download his/her Form 16. It can only be downloaded by the deductor (employer) from his TRACES account.
Can I claim the deductions which are not shown in Form 16?
Yes, you can claim deductions that are not shown in the form while filing your ITR. But make sure to keep supporting documents with you for future reference.
Can I file ITR with multiple Form 16 with Quicko?
If someone has switched jobs during the year, he’ll have multiple Form-16. You need not worry. Just upload one, save it and add another. Quicko will add up all your salaries and deductions from multiple Form-16s.
Can an employer issue Form 16, if no TDS is deducted on salary?
Yes, an employer can still issue Form 16 to you. An employer will not issue Form 16 Part-A since no tax is deducted at source. However, your employer can issue Form 16 Part-B which is a salary statement.