What is Form 16?
Form 16 stands for Certificate of Tax Deducted at Source on Salary.
Form 16 is the statutory tax deduction certificate issued annually by Indian employers under Section 203 of the Income-tax Act, 1961 to employees whose salary had TDS deducted.
Form 16 explained
Form 16 consists of two components: Part A, generated directly from the TRACES portal containing employer and employee details, PAN, TAN, and quarter-by-quarter TDS deposited; and Part B, generated by the employer detailing the comprehensive salary breakdown, allowances, exemptions, deductions, and tax calculation.
Under the Indian tax framework, employers must evaluate TDS under both the default New Tax Regime (Section 115BAC, offering lower progressive tax slabs with minimal exemptions) and the Old Tax Regime (allowing Section 80C, 80D, HRA, and home loan interest deductions) based on the employee's annual election.
Employers must issue Form 16 to employees on or before June 15th following the financial year in which tax was deducted, after filing the fourth-quarter TDS return in Form 24Q by May 31st.
Official source: Income Tax Department of India
How NeuralHR.AI handles Form 16
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