What is Form 16?

Form 16 is an official certificate that companies must provide to salaried employees annually. It shows the amount of salary paid and the amount of tax deducted (TDS) during the financial year.

It is a simple way for employees to check their salary breakup and confirm that tax has been deposited with the Income Tax Department. Employees need Form 16 to file their Income Tax Returns (ITR).

What details are included in Form 16?

Form 16 has two parts: Part A and Part B.

Part A

Shows basic employment details:

• Name of the company and its PAN/TAN number
• Employee’s name and PAN
• Period of employment
• Total tax deducted and deposited during the year

Part B

Gives a detailed salary breakup:

• Total salary paid, allowances, and deductions
• Exemptions like HRA, LT
• Deductions like 80C (investments), 80D (insurance)
• Final taxable income
• Final tax calculated and deposited

Want to understand how your revised salary will impact your taxable income? Use our salary hike calculator to see the updated take-home salary and new tax implications instantly.

What are Form 16A and Form 16B?

Form 16A

Form 16A is used when tax is deducted on non-salary income. This includes:

• Interest earned on bank deposits.
• Income from rent, commissions, or professional fees. 
• It is issued quarterly and shows the amount paid and tax deducted.

Form 16B

Form 16B is issued when an individual buys property worth more than ₹50 lakh. The buyer deducts tax while paying the seller and issues Form 16B as proof.

Difference between Form 16, Form 16A, and Form 16B

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Who is eligible to get Form 16?

• All employees whose salary exceeds the taxable limit and who have had tax deducted are eligible to receive Form 16.
• If an employee’s total salary is below ₹2.5 lakh and no tax is deducted, the company is not required to issue Form 16.
• Some companies still issue Form 16 voluntarily, even if TDS is not deducted, to help employees maintain proper records.

When should HR issue Form 16 for FY 2024-25?

As per tax rules, Form 16 must be issued on or before 15th June 2025 for the financial year 2024-25. HR teams should ideally plan to issue it earlier in June to help employees file their taxes without stress.

How can HR download and issue Form 16?

• Form 16 must be downloaded from the TRACES portal after quarterly TDS returns are filed.
• After downloading, HR can distribute it through:
  
  
  • Employee self-service portals (HRMS)
  • Email
  • Physical copies (if needed)

Employees cannot download Form 16 themselves from any government site. It is the HR’s responsibility to ensure timely issuance.

Why Form 16 is important for employees

• Helps employees file tax returns quickly and correctly.
• Acts as proof that taxes were deducted and paid to the government.
• Required for bank loans, visa applications, and other financial paperwork.
• Helps employees claim deductions and receive tax refunds more quickly.
• Reduces confusion about salary structure and tax deductions.

What if you do not receive Form 16?

You can file your ITR using the following documents instead:

1. Form 26AS
A consolidated tax statement issued by the government that shows all TDS deposited against your PAN, including salary TDS, rent TDS and interest TDS.

2. AIS (annual information statement)
A detailed record of all your financial transactions such as interest, dividends, securities transactions and high-value payments.

3. TIS (taxpayer information summary)
A simplified version of AIS that helps verify and cross-check information used for ITR filing.

4. Salary slips
Use monthly payslips to calculate gross salary, allowances, deductions, perquisites, PF, professional tax and taxable income.

Tip: Always reconcile salary slip figures with Form 26AS to avoid mismatch issues.

How can employees verify their Form 16?

Once you receive Form 16, you must review it carefully. Incorrect details may delay your refund or trigger an income tax notice. Use the checklist below to ensure accuracy.

1. Compare TDS with Form 26AS
The TDS amount shown in Form 16 must match the TDS credited in Form 26AS. If not, your employer may not have deposited the tax.

2. Match taxable salary with payslips
Calculate your annual taxable salary using monthly payslips and ensure the figure matches the taxable income listed in Part B of Form 16.

3. Check exemptions claimed
Verify HRA, LTA, standard deduction, food allowance and other section 10 exemptions. These must align with the investments and proofs you submitted during the year.

4. Verify deductions under Chapter VI-A
Ensure deductions under sections 80C, 80D, 80G, 80TTA/80TTB and others are accurate and supported with proofs.

5. Confirm employer TAN and PAN
Check if the employer’s TAN and both PAN details are correct. Incorrect TAN means your TDS will not reflect in Form 26AS.

6. Check monthly TDS deposit dates
Part A of Form 16 lists when TDS was deposited every month. These dates must match the entries in Form 26AS.

Always cross-check the details in Form 16 with Form 26AS before filing your ITR.

How Form 16 helps employees during ITR filing

Form 16 makes tax filing very easy for employees because:

• It clearly shows salary breakup, exemptions, and deductions.
• It confirms how much tax is already paid.
• It prevents mistakes while filling out ITR forms.
• It helps claim all eligible deductions and avoid notices from the tax department.
• It ensures quick processing of tax refunds.

Is Form 16 mandatory for filing ITR?

Many employees assume that they cannot file their income tax return without Form 16. However, this is not true. While Form 16 makes the tax-filing process easier, the Income Tax Department does not mandate it. If your employer does not issue Form 16 or delays it, you can still file your return accurately.

Simple Sample Template of Form 16

Part A (Summary of Employment and TDS)

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Part B (Detailed Salary and Tax Breakdown)

Disclaimer: This sample shows a simple example. The actual Form 16 will have government-prescribed formats with digital signatures and TRACES authentication numbers.

Conclusion

Form 16 is not just a legal requirement but also a crucial part of employee well-being. Timely issuance builds trust, prevents tax confusion, and enhances employee satisfaction during tax season. Companies with smooth Form 16 processes stand out for their employee-friendly culture.

Form 16 shows your complete salary structure for the year, you can also use our salary hike calculator to estimate how any upcoming raise will change your tax liability and take-home pay.