Form 16 Explained: 5 Things Every Salaried Indian Must Check (FY 2025-26)

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Form 16 is the consolidated TDS certificate your employer issues by 15 June every year, summarising your salary, tax deducted, and exemptions claimed for the financial year. It has two parts — Part A (TDS summary verified against TRACES) and Part B (salary breakdown with deductions). The five things every salaried Indian must verify on Form 16 before filing ITR: PAN accuracy, gross salary match with payslips, TDS in Part A vs Form 26AS, exemptions claimed (HRA, LTA, standard deduction), and final taxable income. A mismatch here is the single biggest reason for ITR refund delays and Section 143(1) intimation notices.

What Form 16 actually is

Form 16 is a TDS (Tax Deducted at Source) certificate issued under Section 203 of the Income Tax Act. Every employer who deducts tax on salary must issue it to their employees by 15 June following the end of the financial year. So Form 16 for FY 2025-26 (April 2025 – March 2026) is due by 15 June 2026.

The form has two distinct parts, both of which you need to file ITR:

• Part A — TDS summary generated from the TRACES portal. Shows quarterly TDS deposited, your employer’s TAN, your PAN, and total tax deducted. Auto-generated from the employer’s TDS returns.
• Part B — manually prepared salary breakdown. Shows gross salary, exemptions (HRA, LTA, leave encashment), standard deduction, Chapter VI-A deductions (80C, 80D, 80CCD, etc.), and final taxable income.

When you receive Form 16 and what to do if you don’t

Form 16 typically arrives in your registered email by mid-June or via your company’s HR portal. If 15 June has passed and you haven’t received it:

• Email HR explicitly asking for “Form 16 for FY 2025-26”
• If your employer didn’t deduct TDS (because your salary was below the taxable limit), they’re not legally required to issue Form 16 — but they should still issue a salary certificate. Request one.
• If your employer is unreachable (left the job, company shutdown), download Form 26AS from incometax.gov.in — it shows all TDS deducted in your name regardless of employer.
• Penalty under Section 272A(2)(g): ₹100 per day for late or non-issuance of Form 16. The employee can complain to the TDS Officer who can fine the employer.

The 5 things every salaried Indian must check on Form 16

Check 1: PAN is correct

The single most common error. If your PAN on Form 16 doesn’t match your actual PAN, the TDS deducted won’t credit to your account. The Income Tax Department’s e-filing portal will show a refund as “Pending — PAN mismatch” until the employer files a revised TDS return.

Action: cross-verify PAN on Form 16 character-by-character against your PAN card. Any mismatch — email HR immediately and ask them to file a corrected TDS return (Form 24Q correction). It takes 3-4 weeks to reflect.

Check 2: Gross salary matches your payslips

Sum the gross salary from all 12 monthly payslips and compare with “Gross Salary” in Part B of Form 16. They should match within ₹100-500 (small rounding). A larger gap means:

• You missed a bonus, performance pay, or one-time payment
• Your variable pay calculation is wrong on either side
• Stock option (ESOP/RSU) vesting wasn’t reported

Action: if the gap is more than 1% of your annual salary, flag it with HR. Don’t file ITR until resolved — filing with wrong figures can attract a Section 143(1) intimation.

Check 3: TDS in Part A matches Form 26AS exactly

This is the single most important check. Part A of Form 16 shows what your employer reports as TDS deducted. Form 26AS (downloadable from your IT account) shows what the IT Department actually received. They must match.

If TDS in Form 16 Part A is higher than Form 26AS:

• Your employer deducted but didn’t deposit the tax to government (Section 271C — penalty for employer, but you lose the refund)
• Or the employer made a TDS deposit error (wrong PAN, wrong period)

You cannot claim refund of TDS that’s not in Form 26AS. Resolve this with HR before filing ITR. Detailed AIS/26AS reconciliation guide.

Check 4: Exemptions claimed (HRA, LTA, standard deduction)

Look at “Allowances exempt under Section 10” in Form 16 Part B. Verify:

• HRA exemption — should equal the least of (actual HRA received / actual rent paid minus 10% basic / 50% basic for metro or 40% for non-metro). If your HRA exemption is ₹0 despite paying rent, you didn’t submit rent receipts to HR in time — you can still claim it directly in ITR with proper documentation.
• LTA — exempt only if you actually travelled and submitted bills. Can be claimed twice in a 4-year block.
• Standard Deduction — fixed at ₹50,000 for FY 2025-26 under both Old and New regimes (no documentation needed).
• Leave Encashment, Gratuity — separate sub-limits and conditions; if missed by employer, can be claimed in ITR.

Check 5: Chapter VI-A deductions match your investment proofs

Section 80C (PPF, ELSS, NPS, life insurance, home loan principal): max ₹1.5L. Section 80D (health insurance for self + parents): up to ₹75K. Section 80CCD(1B) (NPS Tier 1 extra deduction): up to ₹50K. Section 80E, 80EEA, 80G, etc.

Verify each amount matches what you actually invested or paid. Missing deductions? You can still claim them while filing ITR — Form 16 is your employer’s reckoning, but your final ITR can include items they missed.

How Form 16 fits into ITR filing

The Income Tax Department’s e-filing portal pre-fills 80-90% of your ITR using data from Form 16 (via Form 26AS / AIS). You log in, the system populates salary, TDS, deductions. Your job becomes:

1. Verify the pre-filled figures match Form 16 and your payslips
2. Add any items missed (e.g., HRA you didn’t claim through HR, additional 80D paid for parents)
3. Add income from other sources (interest, capital gains, freelance work)
4. File. Full step-by-step guide.

Form 16 vs Form 16A — what’s the difference?

Easy confusion: Form 16 covers salary TDS only. Form 16A is the TDS certificate for non-salary income (bank interest, freelance payments, rent received, contractor income). If you have FD interest above ₹40,000 (₹50K for seniors), the bank issues Form 16A. Both feed into your ITR.

What to do if Form 16 shows a Refund due

If TDS deducted is more than your final tax liability (calculated using the regime you choose), Form 16 won’t show the refund — it just shows tax deducted. The refund is computed when you file ITR. Process:

1. File ITR by 31 July 2026 (for FY 2025-26)
2. Pre-validate your bank account on the IT portal
3. Refund typically credited in 15-45 days after e-verification
4. Track at incometax.gov.in → Refund Status

Form 16 if you switched jobs in FY 2025-26

Two employers means two Form 16s. Sum the gross salary from both for total income. TDS from both employers credits to your account in Form 26AS. Critical issue: each employer applies the basic exemption limit and tax slabs individually, so combined your tax liability is usually higher — and you’ll need to pay the difference as self-assessment tax before filing.

Action: use the income tax calculator with your combined salary, calculate liability, subtract TDS from both Form 16s, pay the gap as self-assessment tax before filing ITR.

Common Form 16 errors and fixes

• Wrong assessment year printed — should say “AY 2026-27” for FY 2025-26. If wrong, request reissue.
• Salary breakdown missing components — bonus, ESOP, gratuity, LTA arrears. Compare against company HR system.
• TDS in Form 16 but not in Form 26AS — employer deducted but didn’t deposit. Push HR; escalate to TDS officer if unresolved.
• No HRA exemption despite paying rent — submit rent receipts retroactively or claim in ITR directly.

Digital signature on Form 16

Form 16 should be digitally signed by an authorised representative of your employer. Look for the “Digital Signature Certificate” stamp at the bottom of Part A. If your Form 16 isn’t digitally signed, it’s still valid for ITR but harder to verify — most companies now issue digitally signed versions automatically.

Verdict

Form 16 is the foundation document of every Indian salaried person’s ITR. Spend 20 minutes the day it arrives going through the 5 checks above — it saves weeks of refund delay and prevents Section 143(1) intimation notices that hit your inbox 6-12 months after filing. The biggest mistakes are not checking PAN accuracy and not reconciling TDS in Part A with Form 26AS. Both are easy fixes if caught in June; both become nightmare paper trails if caught in October. Once verified, Form 16 + Form 26AS + AIS give you 95% of what you need to file ITR online in 30 minutes.