It’s difficult to hold on to the money earned by us in today’s date. We as a salaried person are all consumers, the moment we step out of the house; we are exposed to a wide variety of options.
All the way from goods, food to services. The list of things one can spend on is never ending. We are not safe out there. We have to be on guard and think carefully before making any financial related decisions. We must weigh the pros and cons the logic behind putting our money where our heart is.
These are tough times that we live in. These are times of demonetisation, over-exposure to e-commerce sites, surging prices of heavily depreciable goods and deflating rates of assets. It’s funny the way we choose our investments; we would find it sensible to spend a rather a large sum of money on a mobile phone, as opposed to investing the same amount of money in precious metals, mutual funds or appreciable shares and business related investments.
To put it into perspective its next to impossible to not be able to make very bad investment related decisions. These are testing times for generation. The ones who rise above the materialistic rat race and see the bigger picture will be the victorious one.
Let’s discuss how the government benefits from our habits. The government knowing our tendencies of making bad investment related decisions has found a way to drive some money back into the country. Taxation. The one and only word that petrifies even a salaried person who must be earning a lot of money to a business man who must be stable in his line of work.
Taxation from the view point of the tax payer is a thief or thug, holding him at gunpoint and extracting every last bit of savings or pocket money. Whereas from the view point of the one collecting tax is requesting the person who is earning on the land of the one collecting the tax, to part ways with a very little sum of money in order to maintain and flourish the land that he is living in for the benefit of the tax payer and the other tenants who are utilising the land. In other words, ’rent’.
‘Rent’ seems like a justifiable proposition as opposed to tax, but still the part where we have t pay it makes our stomach cringe and blood boil. The feeling is amplified if one is just starting out in his professional career and starting to make a living of bare minimum in order to support their family and themselves. It almost makes them feel like they are being bullied and stripped of whatever they have.
In a way its very rational for the tax payer to feel that way, but with the right amount of knowledge and investments, one can save themselves a fortune. We at Policy Bazaar are here to help with that. So moving on to the topic of discussion, today let’s consider one of the aspects of taxation, which is, ‘Form 16’. To be more specific lets discuss, ‘What is part A and part B of form 16?’
You can have a rather elaborate discussion on form 16 with an expert or simply look up it up on the internet, what is Form 16. You can check out information on form 16 by searching, ‘form 16 part b in excel format for ay 2015-16’ or ‘difference between form 16 part a and part b’. There are also other terminologies such as, ‘form 16 part a and part b difference’ and ‘how to fill form 16 for salary with example’
Lets go about understanding what is form 16.
What is Form 16?
Income tax form 16, is a document provided by your employer that signifies that the employer has deducted TDS for the current financial year from your salary. The rule for issuing form 16 is very simple, if the employer has deducted the TDS for the year, it is mandatory for them to issue a from 16 to the employee. The important date to be remembered is 31st of May, before which it is mandatory for the employer to issue the certificate to the employee. As the next financial year will begin on 1st of June.
What are the Components of Form 16?
Form 16 has mainly just 2 components, Part A and Part B. So what are these 2 parts all about lets depict it in a table as mentioned below,
Name and address of the employer
The breakup of amount paid in terms of salary
PAN number and TAN number of the employer
Deductions that are approved under the income tax act in (chapter VIA)
Summarising the deduction on tax on a quarterly basis that is shown by the employer
The relief that can be provided under section 89
Year of assessment
In the situation where you have held more than one job in the year, you shall have 2 form 16’s
The form no. 16 must be downloaded through the traces portal, one can look up, ‘form 16 part a and part b download’ or ‘form 16 format’, ‘form 16 pdf’.
Part B has to be prepared manually by the employer himself and shared with the employee.
Let’s discuss form 16A in detail
What is Form 16A?
To simplify, form 16A is also a TDS certificate. The mail difference in between form 16A and form 16 is, while form 16 is only meant for salaried income, form 16A is meant for both salaried and income other than that for salaried professionals.
To give you an example, form 16A can be issued by a bank for deducting TDS for a fixed deposit, for TDS deducted on commission related to insurance or TDS on rent receipts, in fact any income of any type that you receive on which TDS can be deducted. It’s that simple.
The certificate that you shall receive will have other details such as details of income that you have received in the past financial year, it speaks about the things such as the TDS deposited for that year.
Let’s discuss a little more about Part A.
Part A - Form 16A
Part A of form 16 as discussed above, it represents the quarterly return or the details of the salary paid to the employee, what is also called the form 24Q. Annexure 1 of form 24Q presents the details in the order of deduction of the salary paid. It is available in the column that talks about, amount paid or credited in the order of every employee.
The income tax does not specify or speak about the details of the term the ‘amount paid or credited’ in Annexure I of form 24Q. The organizations though refer to the same and understand it as gross pay paid to the employee each and every month.
Part B - Form 16A
The form 24 Q filled for the last quarter contains data for both Annexure I and II (As opposed to the form 24Q for the first 3 quarters, it contains only the data of Annexure I and Annexure II is left blank ). The data in Annexure II is the data that the income tax department considers for verifying the tax liability on an annual basis. Also the data should match the salary and details issued by the employees.
Technically the details of the amount mentioned should match in Part A and B, if it does not then the details mentioned will be considered and it will be taken in conclusion that the firm has over or under deducted the tax from the employee, to know more you may have a look at how to fill form 16 for salary with example, or you can also look out for form 16 part b traces or form 16 part a and part b difference.
You can download the form 16A and B part by looking at form 16 part b in excel format for ay 2015-16 online also you will be able to ensure that these forms are easily available with us on our website, visit us at http://policybaazar.com/.
It is always suggested to understand these terminologies better, do thorough research and speak with an expert who will be able to guide you in every way on matters related to Form 16A and B. You can connect with any of our representatives at any point and get a proper understanding regarding any doubts you might have about these terminologies.
Do ensure that even when you are done with all of the above and you have submitted the same, do not forget the visit the site and follow up with the concerned authorities regarding the status of your submission. Just to be on the safer side.
It is very important to remember that the authorities have very big stack of data that has to be processed at any given time and it gets all the more difficult to keep a track of the exact number of submissions and whether or not they are up to the mark.
As a tax payer it is the duty of the tax payer to have a look into it and if required submit it all over again. Try to avoid any surprises by checking with someone who has experience in dealing with matters related to form 16.
All and all these process get easier, when we repeat it time and again. Within no time you will be the expert on it and will start advising other people on these matters. Till that time you can rely on us.
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