What Is Form 16 and How to Read Every Section of It
Every salaried employee eventually holds a Form 16 and treats it like a black box to hand to whoever files their return. It's actually a document with two distinct, readable sections, and knowing what each one is for makes it much easier to catch a payroll mistake before it becomes a tax filing problem.
This covers Part A vs Part B, how to check it against your own payslips, what to do if the numbers disagree, and, because the certificate itself is changing name under the new tax law, which document actually applies to the year you're looking at.
Which certificate applies to you
For the return most readers are filing right now, for FY 2025-26 (AY 2026-27), the certificate is Form 16, issued under Section 192 of the Income-tax Act, 1961. Everything below describes that document, and it's the current, correct one for that filing.
Salary TDS itself is reported to fall under a renumbered Section 392 of the Income-tax Act, 2025 for income earned from April 2026 onward, and multiple sources report the certificate itself being renamed to a new "Form 130" under the new Act. We were not able to independently verify the new form's exact name or number against primary text directly. Treat that specific detail as reported rather than confirmed, and expect the underlying content (salary breakup, deductions, TDS summary) to work the same way regardless of what the certificate ends up being called for that later year.
What Form 16 actually is
Form 16 is a certificate your employer issues after the financial year ends, showing your total salary, the exemptions and deductions applied, and the exact TDS deducted and deposited with the government on your behalf across the year. It has two parts, generated differently and serving different purposes.
The gross-to-net gap it documents is the same one covered in CTC vs take-home salary, just presented as an official year-end certificate rather than a monthly payslip.
Part A: the TDS summary
Part A is generated by your employer directly from the government's TRACES portal, not typed up manually, which is why its figures are considered government-verified rather than just employer-reported. It shows your employer's PAN and TAN, your own PAN, and a quarter-by-quarter summary of TDS deducted and deposited against your name.
Part B: the salary breakup
Part B is prepared by your employer as an annexure to Part A, not pulled from a government system. It contains the actual detail: your gross salary broken into components, exemptions claimed under Section 10 (like HRA), deductions under Chapter VI-A (80C, 80D and similar), and the final tax computed on that basis. Your PF contribution shows up here too, as part of the salary breakup. See Provident Fund explained if that figure on your Form 16 doesn't match what you expected.
| Part | Source | What it shows |
|---|---|---|
| Part A | Generated from the TRACES portal | Quarter-wise TDS deducted and deposited |
| Part B | Prepared by the employer | Salary breakup, exemptions, deductions, tax computed |
Matching it against your own payslips
Your 12 payslips for the year should sum to the same gross salary figure Form 16 shows, and the total TDS across those payslips should match Part A's quarterly figures. This is worth actually doing, not assuming. Payroll systems occasionally miss a mid-year correction (a raise, a bonus, or a declaration submitted late), and Form 16 is exactly where that shows up as a discrepancy.
What to do if the numbers don't match
Raise it with payroll or HR before you file, not after. Form 16 is meant to reflect what was actually deducted and deposited, so a genuine mismatch usually points to a payroll-side error that's easier to correct at the source than to work around at filing time. Separately, it's worth checking your figures against Form 26AS and the Annual Information Statement on the income tax portal, since those reflect what the government's system actually received, the authoritative record if Form 16 and your payslips disagree with each other.
Using it to file your return
Most of the fields your income tax return pre-fills for salary income are pulled from the same TDS data Form 16 summarises, so the two should already largely agree by the time you file. Form 16 is still worth keeping and cross-checking rather than trusting the pre-fill blindly. It's your own record of what your employer actually reported, useful if a pre-filled figure looks wrong or if you need to explain a discrepancy later.
When you should receive it
Employers are expected to issue Form 16 for a financial year by 15 June of the following year, for FY 2025-26, that's 15 June 2026. A commonly cited penalty for late issuance is ₹100 per day per certificate, though this is worth confirming with your employer's payroll team rather than treated as something you can enforce directly yourself.
Common mistakes
- Filing from only one employer's Form 16. Switching jobs mid-year means two certificates and one combined annual income figure, not two separate filings.
- Treating Form 16 as your final tax bill. It shows TDS already deducted, not your complete tax liability if you have other income or deductions payroll doesn't know about.
- Not checking Part A and Part B actually match your own records. A quiet payroll error is far easier to fix before filing than after.
- Confusing Form 16 with Form 16A. One is for salary TDS, the other for non-salary TDS (a freelancer's client-deducted tax). They're not interchangeable documents.