Forms introduced under the Income-tax Act, 1961 such as the 16, 16A & 16B relate to TDS as per specific situations. The employer should understand what is Form 16 before issuing it to an employee, which specifies the total amount of tax deducted from an employees’ salary.
Civic duty includes paying tax regularly on or before the deadline. The salary for government employees’, expenses related to defence weaponry, agricultural developments and social welfare of the society are primary reasons to pay tax.
Income tax form 16 has two significant parts to it, namely, Part A and Part B. First part includes necessary information about an employer and employee such as PAN, TAN (in case of the employer), address and the amount deducted from the salary as tax. The second part is a detailed breakup of salary of an employee and quarter wise split-up of TDS.
Form 16B is also a TDS certificate issued by a buyer to a seller stating total amount of tax deducted from sum value of property sold/bought. Form 16A is related to other income of an employee except for salary and issued by the deductor. A bank uses it to state total amount of tax deposited on any fixed deposit held with it.
The significant difference between Form 16A and Form 16B lies in nature of tax deducted at source. The latter is collected at the time of purchase of immovable property, while the former is a deduction against other income of the employee.
Do not miss tax deadlines to avoid hefty fines. A loyal citizen should duly file his/her income tax return regularly. It benefits not only the governemnt but helps the taxpayer generate a strong financial portfolio.
Additional read: What Is Form 16 And Why Is It Important?