What is Form 16? It is a certificate your employer issues once a year confirming how much salary it paid you and how much income tax it cut from that salary and deposited with the government. Think of it as the employer's receipt for the tax it collected from you on the department's behalf.
It has two parts. Part A is the deposit record taken from TRACES, and Part B is the working of your salary and tax. In short, Form 16 means proof of salary tax paid. This page explains what each line means and when the form is needed. For dates, related forms and the new Form 130, go to the Form 16 hub.
Quick facts
Meaning
Salary TDS certificateLegal basis
Section 203 with Rule 31 (1961 Act)Part A
Employer and employee PAN, TAN, tax deposited each quarterPart B
Salary, exemptions, deductions, tax worked outMain use
Filing ITR; proof of income for loansFrom tax year 2026-27
Called Form 130
Form 16 meaning in plain words
Your employer must deduct tax from your salary every month under section 192 and pay it into the government account. Form 16 is the proof that it did. Without it, you would have no simple record that the tax taken from your pay actually reached your PAN.
Only salary goes into Form 16. Interest on deposits, fees from side work or rent you receive are certified separately in Form 16A by whoever paid them.
Form 16 Part A: the TRACES record
| Item in Part A | What it tells you | What to check |
|---|---|---|
| Employer name, TAN and PAN | Who deducted the tax | TAN matches the one in Form 26AS |
| Employee PAN | Whose credit it is | Your PAN is correct; one wrong letter sends the credit elsewhere |
| Period of employment | Months worked with this employer | Correct start or leaving date |
| Quarter wise amount paid and tax deducted | Salary and TDS for each quarter | Totals agree with your salary slips |
| Receipt numbers of TDS returns | Proof the quarterly returns were filed | A number is present for every quarter |
Part A must be generated from TRACES. A certificate typed up by payroll without the TRACES Part A is not the proper form.
Form 16 Part B: the salary and tax working
Part B is the annexure prepared from the employer's payroll. It moves from gross salary down to the tax figure in this order:
- Gross salary, including allowances and perquisites.
- Exempt allowances under section 10, such as HRA and leave travel, in the old regime.
- Standard deduction (₹75,000 new regime, ₹50,000 old regime) and professional tax.
- Other income you declared to your employer, such as a house property loss.
- Chapter VI-A deductions like 80C and 80D, allowed only under the old regime.
- Tax on that income, 87A rebate, cess, and any relief under section 89.
Form 16 Part A and B read together: an example
Sana works for one employer all year in the old regime. Her Part B shows gross salary ₹9,00,000, HRA exempt ₹1,20,000, standard deduction ₹50,000, professional tax ₹2,500, and 80C ₹1,50,000.
Total income: ₹9,00,000 minus ₹1,20,000 minus ₹50,000 minus ₹2,500 minus ₹1,50,000 = ₹5,77,500.
Old regime tax: 5% of ₹2,50,000 = ₹12,500, plus 20% of ₹77,500 = ₹15,500. Total ₹28,000. The old regime rebate stops at ₹5 lakh of income, so none here. Cess 4% = ₹1,120. Tax: ₹29,120.
Her Part A should show TDS of ₹29,120 across the four quarters. If the quarterly figures add to ₹29,120, the employer has deposited every rupee it cut.
What is Form 16 used for, and why is it required
| Need | How Form 16 helps |
|---|---|
| Filing your ITR | Salary, exemptions and TDS figures to match against the pre-filled return |
| Loan application | Lenders treat it as reliable proof of salary and tax paid |
| Changing jobs | The new employer adds your earlier salary to work out correct TDS |
| Checking tax credit | Compare Part A with Form 26AS to confirm deposits |
| Responding to a notice | Shows the employer deducted the tax, if credit is missing |
Form 16 is not filed with your return. You keep it. The return itself carries the figures, and the department matches them with the employer's TDS return.
What is Form 16 for loan applications
When a lender asks for Form 16, it wants a document it can trust more than a salary slip, because the tax figures tie back to government records. Most lenders ask for two or three years. Give the digitally signed PDF as received. If you are in your first year with an employer, a salary slip and offer letter usually stand in until the first Form 16 is issued after the year ends.
Form 16 under the Income-tax Act, 2025
Salary earned in FY 2025-26 gets a Form 16, issued by 15 June after that year. Salary from tax year 2026-27 onward is certified in Form 130, as set by the Income-tax Rules, 2026, with TDS deducted under section 392. The meaning stays the same: a yearly employer certificate of salary and tax deducted. The TDS on salary page explains how the monthly deduction is worked out.
When Form 16 does not look right
| What you notice | What to do |
|---|---|
| TDS in Part A is lower than what was cut from your pay | Ask HR for the challan details; until fixed, the tax will not show in Form 26AS |
| Rent or 80C proof given but not in Part B | You can still claim it in the old regime in your return if you have proof |
| Two Form 16s, both giving the full standard deduction | Claim it only once in your ITR |
| No Form 16 at all | See Form 16 download for other ways to get the figures |
Information on this page is general and based on the Acts and Rules; it is not advice on your own salary. Forms and rules get updated, so ask a chartered accountant, or see the department's portal, about your own salary.
Sources we checked
- Income-tax Act, 1961, sections 192 and 203
- Income-tax Rules, 1962, rule 31 and Form 16
- Income-tax Act, 2025, section 392
- Income-tax Rules, 2026, Form 130
Frequently asked questions
What is Form 16 in income tax?
This is the TDS certificate for salary under section 203 of the 1961 Act. Your employer issues it by 15 June after the financial year, showing salary paid and tax deducted and deposited.
What is the difference between Form 16 Part A and Part B?
Part A is the TRACES record of tax deducted and deposited each quarter, with TAN and PAN. Part B is the employer's working of salary, exemptions, deductions and tax.
Why is Form 16 required if the portal pre-fills my salary?
The pre-filled data comes from the employer's TDS return, which can contain mistakes. Form 16 lets you check that data and spot exemptions or deductions missing from the pre-fill.
Is Form 16 the same as a salary slip?
No. A salary slip covers one month. Form 16 covers the full year and confirms the tax deposited, so it carries more weight.
What is the use of Form 16 if my tax is nil?
It still proves your income and shows any TDS you can claim back. If no tax was deducted, the employer is not required to issue it.