Payroll and HR glossary
Form 16
Certificate of tax deducted at source on salary
Form 16 is the certificate an employer gives each employee showing the salary paid and the tax deducted from it in a year. From tax year 2026-27, under the Income-tax Act, 2025, it is replaced by Form 130, issued by 15 June after the tax year.
Why it matters to your business
The salary TDS certificate is the document your employees use to file their income tax returns, apply for loans and visas, and prove their income. Issuing it on time is a legal duty, with a penalty for each day of delay. An accurate certificate also shows that the tax you deducted reached the government against their PAN.
How it works
As of September 2026:
- For 2025-26 and earlier years: Form 16 under the Income-tax Act, 1961, in two parts. Part A is downloaded from the TDS portal; Part B is prepared by the employer.
- From tax year 2026-27: Form 130 under the Income-tax Rules, 2026. It serves the same purpose, with a redesigned layout of basic details, a TDS summary and a detailed computation.
- Due date: 15 June after the year, in both cases.
- Source: the figures must match the quarterly TDS returns you file (see TDS on salary). A correction to a return means a revised certificate.
What the employee should check
- PAN, name and the period of employment.
- Gross salary, HRA and other exemptions claimed under the old regime.
- Deductions allowed, such as professional tax under the old regime and the standard deduction.
- Total tax deducted, which should match their annual tax statement.
Common mistakes
- Issuing Part B figures that do not match the quarterly returns.
- Showing the wrong tax regime, which confuses the employee’s return.
- Missing the 15 June deadline because the last quarter’s return was filed late.
Questions about Form 16
When must an employer issue Form 16?
By 15 June after the end of the year. For 2025-26 that was Form 16, due by 15-06-2026. For tax year 2026-27 it is Form 130, due by 15-06-2027.
What does Form 16 contain?
Part A, generated from the TDS returns on the government's TDS portal, shows the employer's and employee's PAN and TAN and the tax deducted and deposited each quarter. Part B shows the salary break-up, exemptions, deductions and the tax worked out for the year.
Is Form 16 needed to file the income tax return?
It is not attached to the return, but the employee uses it to fill the salary details and should check it against their annual tax statement (Form 26AS) and AIS before filing.
What if an employee changed jobs during the year?
Each employer issues its own certificate for the period of employment and the tax it deducted. The employee adds them up when filing the return.
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