How to Read Your Form 16: A Section-by-Section Guide for FY 2025-26
Your Form 16 lands in your inbox around June. By then your tax has already been deducted, deposited, and reported in four quarterly TDS returns. The certificate is a receipt. But it is also the single document that decides what you put on every line of your ITR.
Here is how to read every section, and one thing the internet keeps getting wrong about Form 16 in 2026.
Form 16 Is Not Your ITR
The most common confusion among first-time filers: Form 16 is not a return. It is a TDS certificate your employer issues to you under Section 203, summarising the tax they deducted from your salary under Section 192. Submitting Form 16 to anyone is not "filing." You still have to log in to incometax.gov.in, pick a return type (usually ITR-1 or ITR-2), and file it yourself.
What Form 16 gives you is the easiest possible head-start: every number you need to fill in ITR-1 is sitting in two pages of PDF, and the figures match what the portal pre-fills from TRACES.
Part A: The TDS Receipt
Part A is generated from TRACES, the TDS reconciliation portal, and is digitally signed. If your employer typed it manually in Word, it is not a valid Part A. Look for the seven-character alphabetic certificate number at the top right and the digital signature at the bottom.
The fields that matter:
- Employer PAN and TAN - the employer's tax IDs. The TAN is what TRACES uses to attribute your TDS.
- Your PAN - if this is wrong, your TDS is sitting against the wrong taxpayer. Fix it before chasing anything else.
- Period of employment - the months this employer covered. Job-changers must check this before combining two Form 16s.
- Quarterly TDS table - amount paid, tax deducted, tax deposited, BSR code, challan number, and a "Status of matching with OLTAS" column. The codes are U / P / F / O. You want F (Final) - meaning the deposit has reconciled with the bank's record. P (Provisional) is normal for government deductors and converts to F after PAO verification. U (Unmatched) or O (Overbooked) means the deposit has not reconciled and your TDS credit is at risk.
Part B: The Salary-to-Tax Calculation
Part B is where the math lives. It walks down a fixed sequence of buckets and arrives at your tax payable. Read it top to bottom:
- Gross salary - sum of 17(1) basic salary, 17(2) perquisites (rent-free housing, ESOPs, company car), and 17(3) profits in lieu of salary (severance, leave encashment in service).
- Less: Section 10 exemptions - HRA under 10(13A), LTA under 10(5), gratuity under 10(10), leave encashment at retirement under 10(10AA), and others. Mostly empty under the new regime.
- Less: Section 16 deductions - 16(ia) standard deduction (Rs 75,000 new regime, Rs 50,000 old) and 16(iii) professional tax (old regime only).
- Plus: Other income - house property loss or interest income you reported to your employer in Form 12BB.
- Less: Chapter VI-A deductions - 80C, 80CCD(1B), 80D, 80E, 80G, 80TTA. Mostly empty under the new regime. Only 80CCD(2) (employer NPS contribution) and 80CCH (Agniveer) survive the new regime.
- Total taxable income - the figure tax is computed on.
- Tax per slab, less 87A rebate if taxable income is within the threshold, plus surcharge if applicable, plus 4% Health and Education Cess.
Why Your Part B Looks Almost Empty
This is the line every other Form 16 guide gets wrong in 2026.
The new regime has been the default since FY 2023-24, and most salaried filers have stayed on it since. Unless you gave your employer a written declaration opting for the old regime at the start of the year, your Part B was computed under the new regime - which means most of the rows you have read about online are blank or zero on your actual certificate. HRA exemption: gone. LTA: gone. 80C, 80D, 80E, 80G, 80TTA: gone. The standard deduction is Rs 75,000, not Rs 50,000.
It is not a missing number. It is a regime difference. Here is what each row holds in each regime:
| Row in Part B | Old Regime | New Regime (Default) |
|---|---|---|
| Standard deduction (16(ia)) | Rs 50,000 | Rs 75,000 |
| HRA (10(13A)) | Available | Not allowed |
| LTA (10(5)) | Available | Not allowed |
| Professional tax (16(iii)) | Up to Rs 2,500 | Not allowed |
| 80C (PPF, ELSS, life insurance) | Up to Rs 1.5 lakh | Not allowed |
| 80CCD(1B) (additional NPS) | Rs 50,000 | Not allowed |
| 80CCD(2) (employer NPS) | 10% private / 14% govt | 14% of basic + DA |
| 80D (medical insurance) | Rs 25k-Rs 1 lakh (age-tiered) | Not allowed |
| 87A rebate threshold | Rs 5 lakh (Rs 12,500) | Rs 12 lakh (Rs 60,000) |
Cross-Check Before You File
Three reconciliations save you a notice or a delayed refund:
- Form 16 vs Form 26AS - the four Part A quarter totals must add up to your 26AS TDS row. CPC only credits what 26AS shows.
- Form 16 vs AIS - your AIS sees interest, dividends, and securities your employer never reported. If AIS lists income missing from your ITR, you may receive a 143(1)(a) intimation.
- Two Form 16s, one year - mid-year job changers get one from each employer. Both may have applied the basic exemption and 87A rebate independently, which means combined tax was under-deducted. The shortfall shows up at filing as balance payable.
Frequently Asked Questions
By June 15, 2026, under Rule 31(3) of the Income Tax Rules read with Section 203 of the Income Tax Act. The deadline follows the May 31 due date for the Q4 TDS return (Form 24Q). If your employer issues it late, the penalty is Rs 500 per day per certificate under Section 272A(2)(g) (raised from Rs 100 by the Finance Act 2022), capped at the TDS amount.
Part A is the TDS receipt - generated from TRACES, digitally signed, listing what was deducted and deposited each quarter with BSR codes and challan numbers. Part B is the salary breakdown and tax computation - gross salary, Section 10 exemptions, Section 16 deductions, Chapter VI-A deductions, taxable income, and tax payable. Part A proves the tax was paid. Part B explains how that figure was reached.
Yes. Form 16 is not mandatory for filing. If your employer has not issued it, you can file using your salary slips, Form 26AS for TDS credits, and AIS for income reporting. The TDS will still be credited from Form 26AS. Form 16 just makes the data entry faster because the line items are pre-computed.
Because your employer applied the new tax regime, which does not allow HRA exemption under Section 10(13A). The new regime has been the default since FY 2023-24. For HRA to appear on Form 16, you must inform your employer of your old-regime preference at the start of the year (CBDT Circular 4/2023 does not prescribe a specific form for salaried employees - a written declaration is sufficient). You can still switch to the old regime when filing your ITR. Salaried filers without business income simply select the old regime in ITR-1 or ITR-2 - only filers with business or professional income (ITR-3 or ITR-4) need to file Form 10-IEA. Either way, Form 16 will not show the exemption, so you have to claim it yourself in the return.
For TDS amounts, follow Form 26AS - that is what CPC uses to validate credits. If your Form 16 Part A shows higher TDS than 26AS, ask your employer to file a TDS correction return (Form 24Q correction). Mismatches in early June often resolve by end-June as quarterly returns finish processing. For salary or income amounts, also cross-check AIS, which captures sources Form 16 does not show.
First, ask HR - most delays are administrative. If they refuse, you can still file your ITR using payslips and Form 26AS. To escalate formally, write to the jurisdictional Assessing Officer; in practice, the chase is internal rather than regulatory.