Form 16 Explained: Parts A and B, How to Read It and Use It
Form 16 explained for salaried employees: Part A and Part B, what to check, how it matches Form 26AS and AIS, and how it is used to file your ITR.
Form 16 is the one tax document every salaried person in India should understand. It is the employer's certificate that proves tax was deducted from your salary and deposited with the government. Without it, filing your ITR is guesswork. This guide explains each part, shows what to verify, and walks through a worked example.
What is Form 16?
Form 16 is a TDS certificate your employer issues once a year. It shows your salary, the deductions you claimed, and the tax deducted at source (TDS). Under the Income-tax Act, 2025, the corresponding certificate for salary paid in tax years governed by the new law is Form 130, which replaces Form 16. The content is the same in spirit: income paid, tax deducted, tax deposited. The Income Tax Department's own FAQ confirms this on its page for Form 130. Many employers will keep calling it "Form 16" informally.
Part A and Part B
| Part | What it contains |
|---|---|
| Part A | Employer name and TAN, your PAN, period of employment, quarter-wise TDS deducted and deposited, challan details |
| Part B | Salary breakup, exemptions, deductions, taxable income, tax computed, rebate, cess, tax payable |
Part A is generated from the TRACES portal, so it only exists once your employer has filed TDS returns. Part B is prepared by the employer's payroll team. Both parts together make the complete certificate.
When do you get it?
The employer must issue it by 15 June after the end of the financial year. If you changed jobs mid-year, collect one certificate from each employer and add the figures. Do not wait for the last day of ITR filing; mismatches take time to fix.
How to read Part B: a worked example
Take a salary of Rs 18,00,000 under the new regime. The standard deduction is Rs 75,000, so taxable income is Rs 17,25,000.
| Slab (new regime) | Tax (Rs) |
|---|---|
| Up to 4,00,000 | 0 |
| 4,00,001 to 8,00,000 at 5% | 20,000 |
| 8,00,001 to 12,00,000 at 10% | 40,000 |
| 12,00,001 to 16,00,000 at 15% | 60,000 |
| 16,00,001 to 17,25,000 at 20% | 25,000 |
| Total before cess | 1,45,000 |
| Cess at 4% | 5,800 |
| Tax payable | 1,50,800 |
Your Form 16 should show a figure close to Rs 1,50,800 as tax payable, with monthly TDS of about Rs 12,567 spread across the year. For salaries up to Rs 12 lakh of taxable income, the rebate under section 87A can bring tax to zero. If your Part B shows tax for such a salary, ask payroll why.
Form 16 is only as accurate as the declarations you gave your employer. Wrong or missing investment proofs mean wrong TDS.
What to check before filing
- PAN and name: must match your PAN card exactly.
- Gross salary: compare with your payslips. See how salary slip components fit together.
- TDS deposited: Part A figures should match Form 26AS and your AIS on the income tax portal.
- Regime: confirm which regime the employer used. If it is not the one you want, you can still choose the better one while filing your ITR. Compare them in new vs old tax regime.
- HRA and other exemptions: check these flow from your declarations. Read HRA exemption calculation if you pay rent.
Form 16 and your ITR
Most of your ITR can be pre-filled from your AIS. Form 16 helps you verify salary, deductions and TDS before you submit. You do not upload it with the return, but you should keep it for at least a few years as proof, as it is often asked for during loan applications and visa processing.
If you do not get Form 16
You can still file. Use your payslips, bank statements, Form 26AS and AIS to compute income and TDS. Ask the employer in writing for the certificate; failure to issue it attracts a penalty on them, not you. Also see how your CTC converts to in-hand salary to cross-check monthly numbers.
Common Form 16 problems and fixes
TDS in Part A is lower than your payslips show. The employer deducted the tax but did not deposit it, or the PAN was wrong in the TDS return. Ask payroll to correct and refile before you claim credit.
Two employers in one year. Each issues a certificate for their period. Combine salary from both when filing, otherwise you may underpay tax and receive a notice later.
Income from other sources. Form 16 covers only salary. Add interest from savings and fixed deposits, capital gains and rent separately in your return.
Frequently asked questions
Is Form 16 mandatory for filing ITR?
No. It helps you file accurately, but you can file with payslips, Form 26AS and AIS if you do not have it.
What is the difference between Form 16 and Form 130?
Form 130 is the TDS certificate for salary under the Income-tax Act, 2025, and replaces Form 16. The purpose is the same.
Do I get a Form 16 if no tax was deducted?
Employers need to issue it only if TDS was deducted. If your salary was below the taxable limit, you may get a salary statement instead.
Can I correct a wrong Form 16?
Ask your employer to revise it and file a corrected TDS return. Do not edit the figures yourself.
Next step:Use CheatCode to compare job offers on in-hand pay