Form 16 is divided into two main parts, each serving a different purpose. Understanding what Part A and Part B contain helps you verify whether your salary, deductions, and tax calculations are accurate before filing your income tax return.
| Part | What It Contains | Why It Matters |
|---|---|---|
| Part A | Employer & employee details, PAN, TAN, salary paid, TDS deducted, quarterly summary | Helps verify TDS deducted matches Form 26AS |
| Part B | Salary breakup, exemptions, deductions, taxable income, tax calculation | Used directly while filing your income tax return |
While Part A is auto-generated from the TRACES portal, Part B is prepared by your employer. Any mistakes in Part B can directly impact your tax payable or refund.
Form 16 is basically a TDS certificate that your employer gives you at the end of the financial year. It shows how much salary you got, what deductions were applied, and how much tax was cut from your salary. Think of it as your salary summary for the entire year. Every salaried employee who gets TDS deducted should receive this certificate before or during the ITR filing season.
For FY 2025-26, Form 16 has two parts. Part A shows your employer's details, your PAN, employer's TAN, and quarterly TDS summary. Part B has all the details - your gross salary, how much was deducted under different sections like EPF, LIC, health insurance, and most importantly, your tax calculation. This part helps you understand if your employer calculated your tax correctly or if you need to pay more or claim a refund.
Many people don't realize this, but your employer calculates tax only on your salary. If you have other income like rent from a house, interest from fixed deposits, or income from a part-time business, that gets added to your taxable income. That's when you need to use our income tax calculator to get the complete picture and see if you owe more tax or can claim refund.
If you've paid more tax than required during the year (maybe your employer deducted more thinking you wouldn't invest, but you did invest later), you can claim that money back as refund. Use our tax refund calculator to see how much you're eligible to get back. If you live on rent and have HRA in your salary, use our HRA calculator to make sure your Form 16 has the correct HRA exemption calculated.
To know more about Form 16 format and what all information it should contain, check the Income Tax Department website at income tax forms and certificates page for official formats and rules.
Form 16 is not just a certificate, it shows the complete step-by-step calculation of how your tax liability was computed by your employer. Understanding this flow helps you identify errors and avoid overpaying tax.
| Step | Description |
|---|---|
| 1. Gross Salary | Basic salary, HRA, allowances, bonuses, and perquisites |
| 2. Exemptions | HRA exemption, LTA (if applicable), standard deduction |
| 3. Gross Taxable Income | Salary after exemptions |
| 4. Deductions | 80C, 80D, and other eligible deductions |
| 5. Net Taxable Income | Income on which tax is calculated |
| 6. Tax & Cess | Income tax as per slabs + 4% health & education cess |
| 7. TDS Deducted | Tax already deducted by employer during the year |
If you have income other than salary, Form 16 alone is not sufficient. You must add other income separately while filing your return.
Many taxpayers assume Form 16 is always correct, but errors do happen. Reviewing your Form 16 carefully before filing your return can help you avoid notices, delays in refunds, and unnecessary tax payments.
1. Incorrect PAN or employer TAN details
2. Missing or incorrect HRA exemption
3. Deductions claimed but not reflected in Part B
4. TDS mismatch between Form 16 and Form 26AS
5. Not accounting for income from previous employer
6. Assuming Form 16 includes interest or rental income
Always cross-check Form 16 with Form 26AS and AIS before filing your return. A Form 16 calculator helps you validate the numbers independently.
Form 16 is a certificate issued by employers to employees showing the salary paid and tax deducted at source (TDS). It's essential for filing income tax returns.
Form 16 is issued by employers by June 15th of the following financial year. For FY 2024-25, it should be issued by June 15, 2025.
You'll receive separate Form 16 from each employer. You need to consolidate all income and deductions while filing your tax return.
Yes, you can claim HRA even if you live with parents, provided you pay rent to them and have proper rent receipts.
If TDS deducted is more than your actual tax liability, you'll get a refund. The excess amount will be refunded by the Income Tax Department.