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Labour Law & Compliance · Glossary

Form 16

Also called: TDS certificate, salary certificate for ITR

Definition

Form 16 is the annual TDS certificate an employer issues to each salaried employee from whom tax was deducted, due by 15 June following the financial year. Part A, downloaded from TRACES, summarises tax deducted and deposited quarter by quarter; Part B shows the salary breakup, exemptions, deductions and the tax computation. Employees use it to file their income-tax return.

Part A and Part B

Part A is system-generated from the TRACES portal after the employer files the fourth-quarter Form 24Q. It carries the employer's TAN and PAN, the employee's PAN, the period of employment and a quarter-wise table of tax deducted and deposited with challan references. Because it comes from the department's records, it is the part employees and lenders trust.

Part B is prepared by the employer. It lists gross salary component-wise, exempt allowances (relevant only under the old regime), the standard deduction, deductions under Chapter VI-A where applicable, taxable income, tax at slab rates, rebate under section 87A, cess and total tax, reconciled with the TDS in Part A.

Deadlines and process

Form 16 must be issued by 15 June after the financial year ends on 31 March. The sequence is: deposit March TDS by 30 April, file Q4 24Q by its due date, download Part A from TRACES, generate Part B from payroll records, sign digitally or physically, and distribute. Employees who left mid-year also receive Form 16 for the period served.

If no tax was deducted during the year, the employer is not obliged to issue Form 16, though many issue a salary certificate on request.

  • Due date: 15 June following the financial year
  • Part A from TRACES; Part B from payroll
  • Issue to every employee from whom TDS was deducted, including leavers
  • Correct errors by revising the 24Q, then regenerate Part A

Form 16 versus Form 16A versus Form 26AS

Form 16 is for TDS on salary under section 192. Form 16A is the certificate for TDS on non-salary payments such as professional fees, rent or contractor payments. Form 26AS is the employee's own consolidated tax-credit statement on the income-tax portal, showing all TDS reported against their PAN by every deductor.

Employees should match Form 16 Part A with Form 26AS before filing; a mismatch usually means the employer deposited late or filed 24Q with a wrong PAN.

What a Form 16 shows for a ₹9 lakh salary

An employee with annual gross salary of ₹9,00,000 under the new regime has taxable income of ₹8,25,000 after the ₹75,000 standard deduction. Tax at slab rates is ₹20,000 on ₹4–8 lakh plus ₹2,500 on the next ₹25,000, totalling ₹22,500. The section 87A rebate of up to ₹60,000 reduces this to nil, so no TDS was deducted through the year. The employer is not required to issue Form 16 in this case but may issue a salary statement.

How Attend Mitra handles this

Attend Mitra does not generate or file Form 16, Form 24Q or any statutory return. Its payroll preparation produces the salary register and payslips that a company's accountant or tax practitioner uses as inputs when preparing Part B.

Frequently asked questions

What is the due date for issuing Form 16?
15 June following the end of the financial year. For FY 2025-26 that means by 15 June 2026. The employer must first deposit all TDS and file the fourth-quarter Form 24Q so that Part A can be downloaded from TRACES.
What is the difference between Form 16 and Form 16A?
Form 16 certifies TDS on salary under section 192 and is issued by an employer. Form 16A certifies TDS on non-salary payments such as interest, rent, commission or contractor fees. Both should match entries in the recipient's Form 26AS.
Can an employer issue Form 16 if no TDS was deducted?
It is not mandatory when no tax was deducted, which is common for employees under ₹12.75 lakh gross in the new regime. Many employers still issue Part B or a salary certificate because banks and visa authorities ask for it.
What if there is a mistake in Form 16?
Errors in Part A (PAN, amounts, challans) are fixed by filing a correction statement for the relevant quarter's 24Q and regenerating Part A from TRACES. Errors in Part B are corrected by the employer reissuing it. Employees should not file their return on a Form 16 that does not match Form 26AS.

Related terms

TDS on Salary (Section 192)
TDS on salary is the income tax an employer must deduct every month under section 192 of the Income-tax Act, based on the employee's estimated annual taxable salary and chosen tax regime. The deducted amount is deposited by the 7th of the following month (30 April for March), reported quarterly in Form 24Q, and certified to the employee in Form 16 by 15 June.
Gross Salary
Gross salary is the total of all earnings an employee is paid for a period before any deductions: basic, dearness allowance, HRA, other allowances, overtime, incentives and arrears. It excludes employer contributions such as employer EPF and gratuity provisions, which belong to CTC, and it is the base on which ESI coverage and contribution are determined.
HRA (House Rent Allowance)
House rent allowance is a salary component paid to help employees meet rental housing costs, usually set at 40% to 50% of basic. It is fully taxable under the new income-tax regime; the section 10(13A) exemption is available only to employees who opt for the old regime and pay rent. HRA is excluded from wages for EPF and gratuity purposes.
Salary Slip (Payslip)
A salary slip, or payslip, is the statement an employer gives each employee for a pay period showing paid days, earnings by component, deductions by component and net pay, along with identifiers such as UAN, ESI number and PAN. Under the Code on Wages every employer must issue a wage slip, and a PDF sent through an employee app meets the requirement where the rules permit electronic form.
Payroll Register (Wage Register)
A payroll register, also called a wage register or salary register, is the employer's month-wise record of every employee's paid days, earnings by component, deductions, employer contributions and net pay. It is a statutory register under the Code on Wages and the contract-labour rules, the source from which payslips and EPF, ESI and TDS returns are prepared, and the first record an inspector or auditor asks to see.
‘Wages’ Definition and the 50% Rule
Under the four Labour Codes, ‘wages’ means basic pay, dearness allowance and retaining allowance, and these must together be at least 50% of an employee's total remuneration. If excluded allowances such as HRA, conveyance and bonus exceed 50%, the excess is added back to wages. This single definition now drives EPF, gratuity, bonus and overtime calculations across India.

Go deeper

Form 16 guide for employersPayroll compliance checklistSalary slip format explained

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