Tax, GST and company law glossary

Form 16 (Form 130)

The TDS certificate an employer gives each employee, showing salary paid and tax deducted for the year.

In short

From tax year 2026-27, Form 16 is renumbered Form 130 under the Income-tax Rules, 2026. Employers issue it by 15 June after the year ends.

What it means

Form 16 is the certificate an employer gives each employee showing the salary paid and the tax deducted at source (TDS) during the year. Under the Income-tax Rules, 2026, it is renumbered Form 130 from tax year 2026-27. It is the main document a salaried person uses to file the income tax return.

How it works

The certificate has two parts.

  • Part A: generated from the TRACES portal. It shows the employer’s TAN and PAN, the employee’s PAN, and the quarterly TDS deducted and deposited.

  • Part B: prepared by the employer. It shows gross salary, exempt allowances, standard deduction (₹75,000 under the new regime, ₹50,000 under the old), deductions claimed and the tax computation.

  • Due date: issued by 15 June after the end of the year.

  • Investment declarations: under the old regime, employees declare rent, home loan interest and investments to the employer on Form 12BB, now Form 124.

  • If you changed jobs, each employer issues a separate certificate for its period.

Example

Kavita earns a gross salary of ₹15,00,000 in tax year 2026-27 under the new regime, with no other income.

Gross salary: ₹15,00,000

Less standard deduction: ₹75,000

Taxable income: ₹14,25,000

Tax: nil on first ₹4,00,000; 5% on ₹4,00,000 = ₹20,000; 10% on ₹4,00,000 = ₹40,000; 15% on ₹2,25,000 = ₹33,750. Total = ₹93,750.

Rebate under Section 87A: not available, as income exceeds ₹12 lakh.

Cess at 4%: ₹3,750

Total tax: ₹97,500, about ₹8,125 a month as TDS.

Her Form 130 for this year, received by 15 June 2027, should show ₹97,500 in both Part A and Part B. She checks this against Form 26AS (now Form 168) before filing her return.

Key points to remember

  • Form 16 or Form 130 is not filed with the return; keep it for your records and use it to fill the return.

  • Always match TDS in Part A with Form 26AS and AIS; if the employer has not deposited it, the credit will not show.

  • Income from other sources, such as FD interest, is often missing from Form 16; add it yourself.

  • An employer that issues the certificate late can face a penalty of ₹100 per day.

  • If you switched jobs, make sure the total salary from both employers is taxed correctly; otherwise you may owe tax at filing.

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