What is TDS Certificate -Form 16 or 16A

What is TDS Certificate or Tax Deducted at Source Certificate?TDS certificate is to be issued by each deductor who is deducting income tax and to be furnished to the person from whose income / payment the Income tax has been deducted. The TDS certificate should specify the amount of tax deducted and the rate at which it has been deducted. Its significance to the government lies in the fact that it propones the collection of tax, ensures a regular source of revenue, provides for a greater reach and wider base for tax.

TDS requires that the deductor is to deduct tax at the appropriate rates, from payments of specific nature which are being made to a specified recipient. The amount deducted from the person has to be deposited to the credit of the Central Government. The recipient will claim the credit of tax at the time of his personal assessment on the basis of the certificate he has received from the deductor.

There are two types of TDS Certificate;

  • Form 16 – Salary Certificate for TDS
  • Form 16AA – TDS Certificate for Non-Salary Deduction

Form 16 – TDS Certificate for Salary Deduction

In the case of Salary, employer deducted TDS from the salary of employee and issue a certificate in FORM 16 containing details of tax computation, deducted, Deductor’s TAN number, PAN Number and the tax paid to government. This statement will refer to the form that deductor has filled with IT department while depositing the TDS amount that has been deducted from your salary.

Form 16 has two parts, PART A contains details of tax deducted and deposited by the employer. As per the recent changes to the IT rule every employer has to download PART A from TRACES portal.

Form 16 has to be issued every year for a single financial year and for a PAN.

Form 16A – TDS Certificate for Non-Salary Deduction

Form 16A is to be issued for deductions other than salary. It will refer to the details that the deductor has filled with IT department while depositing your deducted income tax.

As in the case of Form 16, PAN number of the deductor and deductee, TAN Number of the deductor, tax deposited and the unique number of the tax receipt should be part of the Form 16A certificate.

To download TDS Certificate form 16 and 16A user has to register himself on TRACES portal. After logging into the portal you can download form 16 and 16A from the download section of the menu.

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