Form 16 Explained: How Salaried Employees Read It and File From It

What Form 16 is

Form 16 is the TDS certificate your employer issues under Section 203 of the Income Tax Act, as proof of the tax deducted from your salary during the year. If tax was deducted from your pay, your employer must issue it, and the deadline for FY 2025-26 is 15 June 2026.

It is the single most important piece of paper (usually a PDF now) for filing a salaried return, and yet most people just check the final tax figure and file it away. Read properly, it tells you exactly how much you earned, what your employer claimed on your behalf, and whether the tax deducted matches what the government has on record. It comes in two parts.

Part A: the TDS record

Part A is generated through the TRACES system and is essentially the tax-deposit record. It contains:

• Your employer's TAN and your PAN, plus both parties' names and addresses.
• The assessment year.
• Quarter-wise TDS deducted and deposited against your PAN.

The first thing to do with Part A is check the basics, your name, PAN, the employer's TAN and the assessment year, are all correct. An error here (a wrong PAN, especially) means the TDS credit may not reach you. Then note the total TDS, because that is the number you will reconcile against Form 26AS.

Part B: the salary computation

Part B is the detailed computation, the part that actually explains your tax. It sets out:

• Your gross salary and its breakup, allowances and perquisites.
• Exemptions claimed (such as HRA and LTA) and the standard deduction.
• Deductions under Chapter VI-A (80C, 80D and others).
• The tax regime used to compute your TDS, old or new.
• Your taxable income, rebate, cess and the final tax.

Where perquisites are involved, they should agree with Form 12BA, a statement of perquisites your employer issues alongside Form 16. Part B is where you see whether your employer applied your HRA, 80C and other claims correctly. If something you were entitled to is missing, you can still claim it on your return.

Reconcile with 26AS and AIS

This is the step that prevents notices, and the one most people skip. Form 16 is not the only source of truth, your return is filed against what has been reported to the Income Tax Department, so reconcile before filing:

• Part A TDS should match Form 26AS, deductor by deductor, against the same employer TAN. Form 26AS is the authoritative TDS-credit document, so claim credit based on it.
• Part B gross salary should match your AIS salary entry. The AIS aggregates your salary plus all other income reported by various entities.

Where they differ, there is usually a reason: partially exempt items like LTA, gratuity or leave encashment may be netted in Form 16 but shown gross in AIS (the difference is the exempt portion), or a revised bonus or perquisite may have updated your AIS without Form 16 being re-issued. For AY 2026-27 salaried filers, salary mismatch is the single biggest cause of a Section 143(1)(a) intimation, so this reconciliation is worth the ten minutes. If a TDS figure does not match, raise it with your employer before filing.

How to file your ITR from it

With Form 16 reconciled, filing is straightforward. The portal now pre-fills much of the return from Form 16, Form 26AS, AIS and TIS, so your job is to verify and correct rather than type from scratch:

1. Log in at the e-filing portal with your PAN and pick the right form, usually ITR-1 for simple salaried income, ITR-2 if you have capital gains or multiple house properties.
2. Verify the pre-filled income, exemptions and deductions against Form 16 Part B, do not accept them blindly.
3. Add any income not in Form 16, bank and FD interest, freelance income, capital gains, which appears in your AIS even where no TDS was cut.
4. Choose your tax regime, the portal computes the tax; compare old versus new if you have significant deductions.
5. Pay any balance tax or note your refund, submit, and e-verify within 30 days, an unverified return is not treated as filed.

Our salaried capital gains guide covers the ITR-2 route, and our income tax service handles the whole filing if you would rather not.

The traps to watch

A few Form 16 mistakes catch salaried filers every year:

• The job-change trap. If you changed jobs in FY 2025-26, you have a Form 16 from each employer. Combine them, and check whether the standard deduction or exemptions were duplicated across employers, which can leave you under-taxed. Paying the difference at filing is far cheaper than after a notice.
• Assuming Form 16 has everything. It shows only salary. Interest, capital gains and other income are yours to add.
• Form 16 versus Form 16A. Form 16 is for salary TDS; Form 16A is for TDS on non-salary income like interest or professional fees. They are different certificates.
• The regime shown is not binding. The regime your employer used for TDS in Part B does not bind your return, you can override it when you file. (If you have any business income, opting out of the new regime needs Form 10-IEA and the switch back is once in a lifetime, but that does not apply to pure salary.)
• No Form 16? If no tax was deducted, your employer may not issue one. You can still file using salary slips, Form 26AS and AIS.

Quick answers

What is Form 16? Your salary TDS certificate, issued by 15 June. What are Part A and Part B? Part A is the TDS record from TRACES; Part B is your salary and tax computation. What do I reconcile it against? Part A with Form 26AS, Part B salary with your AIS. Can I file without it? Yes, using salary slips, 26AS and AIS. Does the regime in Form 16 bind me? No, you can choose either regime on your return. Changed jobs? You have one Form 16 per employer, combine them. Want it filed for you? Our tax team handles salaried returns.