Form 16 & Form 130: What it is, How to Download and ITR Filing for Salaried Employees

Form 16 is a TDS certificate issued by an employer that shows the tax deducted from your salary and a detailed breakup of your income, exemptions, deductions, and taxable amount for the financial year. It is an important document for salaried taxpayers to verify TDS and file their income tax return accurately, and can be downloaded from the employer or payroll portal once issued.

Form 16 Renamed as Form 130

Under the Income Tax Act 2025, Form 16 has been renumbered as Form 130 effective from Tax Year 2026-27 (April 1, 2026) and onwards. For FY 2025-26, your employer will still issue Form 16 as usual.  

What is Form 16?

Form 16 is a TDS certificate issued by the employer containing TDS deducted on salary, the salary income during the financial year. It can be used as a proof of income and TDS deducted during the financial year. It serves as a handy document for ITR filing process as it contains various information related to employer, the taxpayer, TDS deducted, income estimate, deductions claimable etc. It is issued under section 203 of the Income Tax Act.

Form 16 is divided into 2 parts: Part A and Part B. While part A contains a summary of TDS deductions PAN and TAN of the employer, PAN of the employee, etc, part B contains detailed break-up of salary, exemptions and deductions under the Income Tax Act. 

TDS needs to be deducted from the salary when the total income of the taxpayer has crossed basic exemption limit (Rs. 2.5 lakhs under the old regime and Rs. 4 lakhs under the new regime). Note that in case you shifted jobs during the financial year, it is necessary to collect Form 16 from all the employers you have worked with during that year. 

What is Form 130?

Form 130 is the new income tax form under the Income Tax Act 2025. It will replace Form 16 from Tax Year 2026-27 onwards. Form 130 will be issued by employers to employees as proof of Tax Deducted at Source (TDS) on salary and will contain details such as salary paid, deductions, exemptions, and taxes deducted during the financial year.

The purpose of Form 130 is to simplify salary tax reporting and align it with the new structure of the Income Tax Act 2025. Similar to Form 16, employees can use Form 130 while filing their income tax returns (ITR) and verifying the tax deducted by their employer.

Important details Available in Form 16

1. Part - A

• Name and address of employer and employee.
• TAN of the employer
• PAN of employer and employee
• Quarterly break-up of amount of TDS deducted against salary.
• Date in which monthly TDS deducted is deposited to the government.

2. Part-B

• Gross salary (including all allowances and perquisites
• Exempt allowances under section 10 (reduced from gross salary)
• Income other than salary declared for TDS deduction purpose.
• Deductions under chapter VI-A
• Total taxable income offered for TDS deduction
• Estimated tax liability (tax, surcharge, cess and rebate is calculated separately as applicable)
• Relief under section 89.

In the case of salaried employees, Form 16 plays a very important role when it comes to filing income tax returns. It has two components: Part A and Part B.

Who Receives Form 16?

1. Eligibility Criteria

• As per section 203 of the act, the employer is obliged to deduct TDS if the employee's income is taxable. 
• Therefore, every salaried individual whose income falls under the taxable bracket is eligible for Form 16.

2. When Form 16 is not Required?

• If TDS is not deducted for the employee, the employer is not required to provide form 16.
• However, nowadays, many organisations issue this certificate to employees as a good work practice. It contains a consolidated picture of the individual’s earnings and has other additional uses.

Why is Form 16 Required?

Form 16 is a very important document as:

• Proof that the government has received the tax deducted by your employer.
• Assists in the process of filing your income tax return with important information like:
  1. Salary details
  2. deductions against salary
  3. other investment deductions claimed against total income.
• Proof of Salary Income
• Many banks and financial institutions demand Form 16 to verify the person’s credentials while applying for loans.

Form 16 Download

To download Form 16 from the TRACES portal, employers must log in using their PAN (as User ID) and password. After logging in, navigate to the ‘Downloads’ tab, select ‘Form 16’, choose the relevant financial year, and verify the PAN and TDS details. Enter the TDS receipt number, tax deducted, and date, then submit the request. Once processed, Form 16 (Part A & B) will be available for download under the ‘Downloads’ section.

1. How to Download Form 16 For Employer

Step 1: Visit the official TRACES website.

Step 2: If you are already registered, enter your PAN card number (User ID) and Password to log in. For new users, complete the registration process and create a new account.

Step 3: Navigate to the ‘Downloads’ tab and select ‘Form 16.’

Step 4: Choose the Form type and select the financial year for which Form 16 is required.

Step 5: Verify PAN and other details.

Step 6: Enter the TDS receipt number and select the date of the TDS.

Step 7: Add the total tax deducted and collected.

Step 8: Click on submit to request for download.

Step 9: Download the files under the ‘Downloads’ tab once the Form is available for download.

2. How to Download Form 16 For Employee

Employees cannot download Form 16 from the TRACES portal, rather have to get it from their employer. 

Step 1: Contact your HR or Payroll department. 

Step 2: Check your organisation's employee self service portal. 

Step 3: If you have changed jobs, then email your previosu HR as they are legally obligated to issue your Form 16.

Step 4: Verify your Form 16 with Form 26AS in the Income Tax Portal. 

Form 16 Password

• Password for form 16 differs across organisations.
• You can try various combinations of passwords as follows
  1. PAN in lower case and date of birth in DDMMYYYY format.
  2. Only PAN in lower case.
  3. Only PAN in upper case.
  4. Only date of birth in DDMMYYYY format.

Form 16 Has Been Replaced by Form 130 (from FY 2026-27)

Form 130 is a new salary tax statement introduced under the Income Tax Act 2025 to replace the traditional Form 16. It will serve as the official certificate issued by employers showing salary paid, tax deducted at source (TDS), and other relevant tax details for employees.

The form aims to simplify salary reporting and tax compliance by providing a more structured summary of an employee’s taxable income, deductions, and taxes deducted during the financial year.

1. How is Form 130 different from Form 16?

While Form 16 was issued under the Income-tax Act, 1961, Form 130 is introduced under the new tax framework of the Income Tax Act 2025. The new form is expected to provide more streamlined reporting of salary income, deductions, and TDS details, making it easier for taxpayers to verify information while filing their income tax returns.

The purpose remains similar - to act as proof of tax deducted by the employer. But the format and reporting structure have been updated to align with the provisions of the new law.

2. When is Form 130 Applicable?

Form 130 will apply from Tax Year 2026 - 27 onwards. This means that for income earned from 1st April 2026 till 31st March 2027, employers will issue Form 130 instead of Form 16 to their employees.

Key Changes in Form 130

1. Expanded Reporting Structure

The new Form 130 is structured into three parts instead of the earlier format, including detailed sections for deductor details, tax deducted, and annexures with income details. 

2. More Detailed Salary Break-up

Employers are now required to provide a more detailed salary break-up in the new Form 130. This means a more structured breakdown of salary components, allowances, deductions, and taxable income with a focus to increase transparency.

3. Verification of Deductions

The form may include proof identification numbers for certain deductions enabling better verification of claims. 

4. Consolidated TDS Reporting

Form 130 will also cover TDS reporting for salary, pension, and interest income of specified senior citizens in a unified certificate structure.

5. Alignment With New Tax Forms System

The renumbering is a part of a broader effort to standardise tax forms under the new income tax framework. 

Form 16 vs Form 130 - Key Differences

Upload Form 16 & File Income Tax Return

ClearTax software automatically extracts all the relevant information from your Form 16 and prepares your tax return. You do not need to enter anything manually.

Upload your Form 16 to E-File ITR

Benefits of Digital Form 16

With Form 16 now being digitally auto-generated through the Income Tax Department’s TRACES portal, it offers the following benefits:

• Enhanced Accuracy and Reliability: Digital Form 16 ensures consistent and error-free data by being generated directly from the Income Tax Department’s TRACES portal.
• Simplified and Faster Filing Process: Automated data extraction from Digital Form 16 streamlines the ITR filing process, saving time and minimizing errors.
• Faster Refund Processing: Structured digital data enables quicker tax return processing and faster refund disbursal.
• Improved Security: Digital Form 16 is securely stored and protected, ensuring confidentiality of financial information.
• Convenience for Job Changers: Multiple Form 16s can be easily uploaded and consolidated digitally, simplifying tax filing for those who changed jobs.

Points to be Noted while Checking Form 16

• Once an individual receives Form 16 from the employer, it is their responsibility to ensure that all the details are correct.
• Make sure to verify the details mentioned in Form 16, for example, details of the amount of income, TDS deducted, etc.
• If any of the details is mentioned incorrectly, one should immediately reach out to the organization’s HR/Payroll/Finance department and get the same corrected.
• The employer would then correct their end by filing a revised TDS return to credit the TDS amount against the correct PAN. Once the revised TDS return is processed, the employer will issue an updated Form 16 to their employee.

Difference Between Form 16, Form 16A and Form 16B

Difference between Form 16 and Form 26AS

The following are the differences between Form 16 and Form 26AS: