What is Form 16? Everything a Salaried Person Should Know
If you are a salaried employee in India, Form 16 is one of the most important tax documents you will receive every year. It acts as proof that your employer has deducted tax from your salary and deposited it with the Income Tax Department. Whether you are filing your Income Tax Return (ITR), applying for a loan, or verifying your annual income, Form 16 plays a crucial role.
What is Form 16?
Form 16 is a TDS (Tax Deducted at Source) certificate issued annually by an employer to its employees.
It shows:
- Total salary earned during the financial year
- Tax deducted by the employer
- Deductions claimed under various sections (80C, 80D, etc.)
- Tax payable or refundable
Simply put, Form 16 is the proof of tax deducted on salary and helps you file your income tax return accurately.
Who Issues Form 16?
Form 16 is issued by the employer to every salaried employee whose salary Tax Deducted at Source (TDS) has been deducted under Section 192 of the Income-tax Act, 1961.
It does not matter whether the employer is A private company, A government department, A public sector undertaking (PSU), A partnership firm, A proprietorship, A trust, An NGO. If they employ staff and deduct TDS on salary, they are legally responsible for issuing Form 16.
Legal Requirement Under Income Tax Law
As per Section 203 of the Income-tax Act, every person deducting tax at source must provide a TDS certificate to the taxpayer.
For salary payments, this TDS certificate is Form 16.
When is Form 16 Issued?
Form 16 must be issued on or before 15th June of the assessment year (as per Income Tax Rule 31).
Example:
For FY 2025–26, Form 16 should be issued by 15th June 2026.
Structure of Form 16 – Part A and Part B
Form 16 is divided into two parts, each containing different sets of information.
Part A – Summary of TDS on Salary
Part A contains Employer and employee details, Name, Address, PAN of employee, TAN & PAN of employer, Period of employment, Quarterly TDS deposited, Challan identification numbers (CIN), TDS receipt numbers etc.
Part A is generated through TRACES, ensuring accuracy and authenticity.
Part B – Detailed Salary Breakdown
Part B includes Salary components like Basic salary, HRA, Special allowance, Bonus, incentives, Exemptions under Section 10, HRA exemption, LTA and Gratuity exemption.
Deductions under Section 80C (PF, LIC, ELSS, PPF), 80D (Medical insurance), 80G (Donations), 80CCD(1B) (NPS additional contribution)
Taxable income calculation Total tax liability, TDS already deducted by Previous employer, Net tax payable/refund.
Why is Form 16 Important for Salaried Employees?
Here’s why Form 16 matters:
- Essential for Filing Income Tax Return (ITR) It summarizes your entire taxable salary and deductions.
- Proof of Income Banks and financial institutions ask for Form 16 when applying for, home loan, Personal loan, Credit cards
- Helps Verify Income and TDS You can cross-check your TDS details with Form 26AS and AIS.
- Reduces Errors While Filing ITR All salary figures and tax computations are already organized.
- Important for Job Changes When switching jobs, Form 16 helps you submit correct income details to the new employer.
How to Download or Get Form 16?
A salaried person cannot directly download Form 16 from the TRACES portal.
You must obtain it from your employer, who downloads it on your behalf.
What if Your Employer Does Not Give Form 16?
Don’t worry—you can still file your ITR using, Payslips, Form 26AS / AIS, Bank statements, Salary breakup from HR
Form 16 makes filing easier, but it is not mandatory for ITR filing.
Difference Between Form 16, Form 16A, and Form 16B
| Form | Purpose | Issued By |
| Form 16 | TDS on salary | Employer |
| Form 16A | TDS on non-salary (interest, rent, etc.) | Bank/Company |
| Form 16B | TDS on sale of property | Buyer |
9. Common Errors to Check in Form 16
Before filing ITR, verify:
- PAN is correct
- Salary figures match payslips
- Deductions are correctly shown
- TDS matches Form 26AS
- Exemptions claimed are accurate
If any mismatch exists, ask the employer to rectify and re-issue Form 16.
Conclusion Form 16 is more than just a TDS certificate—it is a complete summary of your annual salary, tax deductions, and exemptions.
Every salaried employee should understand it thoroughly to avoid filing errors, prevent tax notices, and ensure financial accuracy.
