Form 16 and Form 16A, are documents used by income earning persons as part of the process of filing Income Tax Returns in India. The Income Tax Act of 1961 and the Income Tax Rules of 1962 are the governing laws of the Income Tax Department of India.
Both Form 16 and Form 16A are proofs of tax deductions at source (TDS) provided by employers to their employees. This is usually applicable towards things such as, winning from a lottery or crossword puzzle; winnings from a horse race, etc.
So what is the difference between Form 16 and Form 16A?
| CRITERIA | FORM 16 | FORM 16A |
| EXPLANATION | It is a certificate under Section 203 Income Tax for tax deducted at source from income chargeable under the head of ‘salaries’. | It is a certificate under Section 203 Income Tax for tax deduction at source for income other than salary. |
| ELIGIBILITY | Anyone who earns a steady and regular income in the form of salary. | Anyone who is either self-employed or a professional with document qualification degree. |
| APPLICABLE TOWARDS | Interest on securities, dividends, interest other than interest on securities, etc. | Issued against rent, commission, professional charges, building, plant, machine hired, commission agents, etc. |
| COMPRISES OF | Proof of income, details of tax paid by employer on behalf of employee, PAN and TAN of employer, PAN of employee, acknowledgement of amount of tax paid, education cess and surcharges. | Name, TAN, PAN of employer; Name and PAN of all employees. Amount paid and nature of payment, receipt number of TDS payment. |
| ONLINE VERIFICATION | Can be verified online | Can be verified online |
What is TAN?
TAN or Tax Deduction and Collection Account Number, in India, is a 10-digit alphanumeric number. It is issued to persons who are expected to deduct or collect tax on payments made by them under the Indian Income Tax Act, 1961.
What is PAN?
PAN or Permanent Account Number is a code that identifies Indians, especially the ones who pay Income Tax diligently. It is a unique; 10 character alphanumeric identifier. It is issued to all judicial entities that are identifiable under the Indian Income Tax Act of 1961.