Form 16 is the tax certificate an employer issues every year to each employee whose tax was deducted at source. It is also the document most employees need for filing their return and for loan applications.
What Form 16 contains
| Part | Contents | Source |
|---|---|---|
| Part A | Employer and employee details, PAN/TAN, quarter-wise TDS deducted and deposited | Downloaded from TRACES after the TDS return is filed |
| Part B (Annexure) | Gross salary, exemptions, standard deduction, chapter VI-A deductions, tax computation | Prepared from payroll data |
When is it due?
Employers issue Form 16 by 15 June after the end of the financial year. For FY 2025-26 (salary up to 31 March 2026) that is Form 16. Under the Income-tax Act, 2025, which came into force on 1 April 2026, the salary TDS certificate for tax year 2026-27 onwards is Form 130, issued by 15 June 2027. Confirm current forms and dates with your advisor.
How Form 16 is generated
- Run payroll every month with accurate salary and TDS.
- Collect and finalise employee declarations (rent, 80C, 80D).
- File quarterly TDS returns so that TRACES shows the TDS credit.
- Download Part A from TRACES.
- Prepare Part B from payroll: gross salary, exemptions, deductions, tax computation.
- Sign and issue both parts to each employee.
Why Form 16 errors happen
- Payroll salary differs from the return
- Declarations changed after payroll was locked
- Missing PAN
- Part A not available because the quarterly return was not filed or has errors
- HRA exemption computed incorrectly for the Old regime
Form 16 from payroll software
NexoraHRMS generates the Part B annexure and a month-wise annual TDS statement for every employee from payroll data, and shows warnings when a declaration is missing. Part A stays with TRACES. See Form 16 software and TDS payroll software. Learn the underlying process in TDS on salary.
✅ Employees: compare Form 16 with your payslips, Form 26AS or annual tax statement, and ask HR to correct mismatches before you file.
Related guides: Payroll Software in India (complete guide)
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