A Tax Deducted at Source (TDS) certificate is a non-negotiable document for taxpayers, as it serves as proof that taxes have been deducted from the payer's Income at the source and remitted to the Government of India by the payer. And now, thanks to digital advancements, this process of obtaining these certificates has become easier, as it lets the taxpayer download TDS certificates online, not only saving time but also making the entire income tax return filing process more straightforward and less cumbersome.
By the end of this blog, you will be familiar with the steps to download the TDS certificate online, understand why these certificates are essential, and know how they facilitate an easy income tax filing experience.
What is Tax Deducted at Source?
Tax deducted at source is a system in Indian taxation under which the government of India collects taxes directly at the source of Income. The TDS aspect is governed by the Indian Income Tax Act of 1961. Under this concept, a person who is making payment of a specified nature is a deductor, and any person who shall receive the payment is a deductee.
Now, before crediting the amount to the deductee, the deductor must deduct the tax at source and remit the same into the account of the central government of India.
What is a TDS Certificate?
Form 14A is a TDS certificate which is issued by the deductor, who could be a company, individual, or even a bank. This certificate serves as proof that tax has been accurately deducted and deposited with the government in respect of Income other than salary.
The Form 16A is crucial for calculating your taxes accurately and filing your Income Tax return, as it reflects the tax deducted from your Income and paid to the central government. The deductor provides this Form 16A, and it is important to keep a copy of it for future reference while filing your taxes.
What is the Importance of a TDS Certificate?
The following are the reasons why a taxpayer must have a TDS certificate:
Acts as a proof: Be it a non-resident Indian (NRI) or a resident of India, the TDS certificate acts as proof that the tax is deducted at the source from the Income.
Tax Credit Claims: TDS certificates are crucial for claiming tax credits, as their absence can complicate the process of claiming tax deductions during the tax filing session.
Income Verification: Furthermore, the tax deducted at source (TDS) certificates help Indian residents and NRIs verify their Income for a financial year, as these certificates have detailed information about the income source and the tax deducted on it.
Eliminated tax Duplication: The tax deducted at source certificates also help ensure that the taxpayers are not obliged to pay the taxes more than once on the same income source.
TDS Certificate Format
Full name and address of the deductor.
Full name and address of the deductee.
Permanent account number of both the deductee and the deductor
Unique TDS certificate Number
The assessment year (AY) for which the certificate is issued
The period covered by the tax deducted at source (TDS) certificate.
Summary of TDS deducted and deposited.
Details about the income source that was subject to TDS, like interest, rent, professional fees, and so on.
TDS challan details include the date of deposit, BSR code, and challan identification number.
Any other relevant information or disclosures.
However, the format of the tax deducted at source may vary as per the updates given by the Income Tax Department. It is the responsibility of the deductor to ensure that the information provided in Form 16A is right and matches the details submitted to the tax authorities.
What are the Different Types of TDS Certificate
Form 16: This form is issued by employers to their salaried employees, which details the TDS deducted from the salary. This form will only be valid for NRIs in the case where an Indian company employs them and they are receiving a salary in India.
Form 16A: Issued for TDS non-salaried expenses. This is the most suitable TDS certificate for NRIs. It is issued by the deductor in the non-salary income, which includes.
Interest income on NRI bank accounts, as well as the fixed deposits.
Rental income from a property in Idnia.
Capital gains from the sale of securities or properties and more.
Form 16C: Issued for TDS on rent, which is payable when the monthly rent is above a certain threshold. This form is primarily applicable to Indian residents.
Difference between Form 16, Form 16A, Form 16B, and Form 26AS
Below is a table showing the differences among the TDS certificates:
Form 16
Form 16A
Form 16B
Form 26AS
The employer issues Form 16 to the employees.
Form 16 A is issued by the person liable to deduct TDS (deductor).
Form 16B is issued by the person who buys the property, who is also obliged to deduct the TDS.
The Indian Income Tax Department issues Form 26AS.
Form 16 reflects the sources of Income that the taxpayer earns in the form of salary, house rent, and other sources. The form also shows the tax calculation of salaried employees after all the exemptions and tax deductions are considered.
Form 16A discusses transactions similar to salary. These transactions can not be commission, interest, etc.
Form 16B reflects the transactions that are directly or indirectly related to the sale of property in India.
Form 26AS is a comprehensive statement of tax that reflects all the sources of Income.
The objective of this form is to provide all the necessary details about the tax deducted on salary, the salary break-up, and other eligible deductions.
The purpose of Form 16A is to provide all the relevant details for the tax deducted at source on non-salaried payments.
Form 16B talks about TDS that has been deducted on payments made to the seller of the property.
Form 26AS reflects the following: Tax deducted at source, TCS entries, some specified financial transactions, taxes paid in advance, and self-assessment payments that are linked to a PAN.
How to Download TDS Certificate Online
Before downloading the TDS certificate, certain prerequisites must be followed, including the following steps.
Ensure that the taxpayer's PAN is linked to the TDS details.
The taxpayer must be registered on the TRACES website ot file TDS certificate forms 16, 16A, or 16B.
To upload the Form 26AS, the taxpayer must make an account on the Income Tax e-filing website.
How to Download Form 16
The taxpayer must access their TRACES account.
Now go to download Tan and select Form 16.
The payee then has to enter all the required details, such as the PAN number of the deductor, the assessment year, and more.
Then complete the required authentication.
Once completed, the taxpayer can file and save their Form 16.
How to Download Form 16A
The taxpayer must log in to their TRACES Account
Under the download sections, choose Form 16A.
Enter the deductor's TAN, the PAN number of the deducee, the relevant quarter, and the financial year.
Post validation, the form is ready to download.
How to Download Form 16B
Log in to the TRACES account.
Go to the Form 16B for buyers and enter transaction details such as the date, amount, and the seller's PAN card.
Download the form once it has been processed.
What is the Role of Form 26AS?
Form 26AS plays an essential role in verifying the TDS deduction.
Detailed Documentary Records: Form 26AS provides a detailed record of all kinds of tax deducted under the taxpayers' PAN. Hence, this form acts as a comprehensive documentary record for obtaining TDS deduction details.
Cross Verification: This form also allows the taxpayer to verify the tax deducted at source reported by the deductors against their records. In a nutshell, Form 26AS helps cross-verify the details of tax deducted at source (TDS) reported by the deductors.
Error-checking: This form helps identify discrepancies in tax deductions or credits and takes protective measures.
Stay Tax-Compliant With Savetaxs.
Handling your taxes effectively starts with having the right knowledge and guidance. Talking about the TDS certificate is one of the most essential aspects of ITR filing, whether it's for filing your TDS certificate PDF or obtaining it from your bank or employer. A TDS certificate for NRIs ensures that your tax deductions are correctly accounted for, making the entire tax filing process effortless and stress-free for NRIs.
Tax planning is crucial, especially for NRIs, as Indian income tax laws can be overwhelming. Hence, for simplified NRI tax management and expert financial advice, SaveTaxs is here to guide you from dawn to dusk. NRIs stay tax complaint and secure with Savetaxs.
*Note: This guide is for informational purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taxing any decision based on the information or the contents. It is advisable to consult with either a Chartered Accountant (CA) or a professional Company Secretary (CS) from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.
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Although it is not mandatory to have a TDS certificate, for managing tax obligations and claiming refunds on income earned in India, you will need a TDS Certificate.
No, neither the non-resident Indians NRIs nor the residents of India can download the TDS certificate if they do not have their TRACES Account.
The TDS Certificate must be preserved for a minimum of six years.
The Different Types of TDS Certificates Are Form 16, Form 16A, Form 16B, and Form 16C.
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