Form 16 – Importance and meaning Share ✕ Updated on: 3rd Nov 2025 14 mins read HR Glossary Payroll Form 16 is a certificate issued under section 203 of the Income Tax Act, 1961 by employers to their employees. Form 16 is an important document and an essential document for salaried employees, serving as a key income tax form and one of the required documents for tax filing and loan approvals. This certificate offers details of TDS/TCS deducted from employees’ salaries each month (as per the category of their tax slabs). The employer deducts TDS from the employee’s salary and deposits it with the government. The employer also deducts TDS and issues Form 16 as proof of this deduction. Form 16 offers a comprehensive summary of salary paid to the employee, the tax deducted at source (TDS) and deposited by employer with the government. It is often required by financial institutions for home loan and home loans applications, as it verifies income for financial transactions. Form 16 includes TDS details such as the amount deducted and deposited, which are essential for verifying income and tax compliance. In this blog let’s discuss in detail about Form 16 TDS certificate and procedures related to it like- Where to Get Form 16? How to Download Form 16? How to Download Form 16 Using PAN number? How to File ITR online using Form 16? How to Get Form 16 from previous employer? Form 16 meaning is simple to understand. It is a certificate that showcases the breakup of salary income and TDS amount deducted by employers. Where to Get Form 16? If you are an employer in India, you can get Form 16 from the official website of the Income Tax Department. If you are an employee, you can request your employer to issue you Form 16 only if they submit TDS to the central government of India. Introduction to Form 16 Form 16 is a crucial document issued by employers to their employees, serving as a certificate of tax deduction at source (TDS) under the Income Tax Act, 1961. This essential document is provided by the employer after deducting TDS from the employee’s salary income and depositing it with the Income Tax Department. Form 16 plays a vital role in the income tax return (ITR) filing process, as it contains all the relevant information about the employee’s salary, tax deductions, and the taxes deducted and paid to the government. By offering a clear summary of the employee’s income and tax liability, Form 16 simplifies the tax filing process and ensures compliance with the Income Tax Act. For both employers and employees, this document is indispensable for accurate tax return preparation, smooth itr filing, and maintaining transparency in salary and tax matters. Components of Form 16 Form 16 is divided into two main components: Part A and Part B, each serving a distinct purpose in the income tax returns process. Part A of Form 16 includes details such as the employer’s name and address, the employee’s PAN, the employer’s TAN, and a summary of TDS deductions made and deposited with the Income Tax Department. This section ensures that all TDS deductions are properly accounted for and reported. Part B of Form 16 provides a detailed breakdown of the employee’s salary, including basic salary, allowances, perquisites, and other components. It also lists deductions claimed under Chapter VI-A, such as those for health insurance premiums and investments, and calculates the total tax liability. Both parts are essential for filing income tax returns, as they collectively provide a comprehensive overview of the employee’s income, applicable deductions, and tds deductions, ensuring accuracy and compliance with the Income Tax Act. Importance of Form 16 in Income Tax Form 16 holds significant importance in the income tax ecosystem, acting as official proof of tax deductions made by the employer under the Income Tax Act. For employees, it serves as a reliable record of their salary income, tax deductions, and TDS deposited with the government, which is crucial for filing accurate income tax returns. The document also enables employees to claim eligible deductions and exemptions, reducing their overall tax liability and minimizing the risk of errors or discrepancies during tax filing. Beyond tax compliance, Form 16 is an essential document for various financial transactions, such as loan approvals, as it verifies both income and tax compliance to financial institutions. Employers are required to issue Form 16 to ensure transparency and accountability in the tax deduction process, making it a cornerstone of the income tax framework for salaried individuals. Benefits of Using Form 16 The benefits of using Form 16 extend to both employees and employers, making it a valuable tool in the income tax return process. For employees, Form 16 streamlines the filing process by providing all the necessary details related to salary income, tax deductions, and TDS, reducing the chances of errors and ensuring a smooth tax return experience. It also helps employees understand their tax liability and plan their finances more effectively. Employers benefit from the structured and transparent process of issuing Form 16, which helps maintain compliance with the Income Tax Act and fosters trust with their workforce. Additionally, financial institutions often require Form 16 as proof of income and tax compliance for loan approvals and other financial transactions, highlighting its importance as an essential document in both personal and professional financial matters. Eligibility Criteria and Issuance Eligibility for receiving Form 16 is determined by the presence of Tax Deducted at Source (TDS) on salary income. Employers are mandated by the Income Tax Act, 1961, to issue Form 16 to employees from whose salary tax has been deducted at source, typically when the taxable salary exceeds the basic exemption limit set by the Income Tax Department. The issuance of Form 16 is a legal requirement, and employers must provide this document to eligible employees by the specified deadline each financial year. Employees can also access and download Form 16 from the TRACES portal, ensuring they have easy access to this essential document for the income tax return filing process. This system ensures that all salaried individuals with deducted TDS have the necessary documentation to file their tax returns accurately and on time. How to Download Form 16 from the Income Tax Department? If you are an employer, you can easily download Form 16 PDF from the official website of the Income Tax Department through the TRACES portal as follows: Step 1: Visit the official website of the Income Tax Department. Step 2: Click on ‘Menu’ and select the ‘Forms/Downloads’ section. During the login process on the TRACES portal, you must enter your PAN as the user ID. Step 3: Locate the ‘Income Tax Forms’ option under the Forms/Downloads section. Step 4: Scroll down to find Form 16 under Income Tax Forms. Step 5: Among the ‘PDF’ and ‘Fillable Form’ options available under ‘Form 16’, choose the relevant option as per your needs. When prompted, enter details from Form 16 to access all the relevant information required for tax filing. Download your Form 16 and attach it while filling out the ITR. The downloaded Form 16 will display the total tax deducted for the financial year. Employers are required to file TDS returns with the Income Tax Department on a quarterly basis, and the issuance of Form 16 is linked to the filing and verification of these TDS returns. How to Download Form 16 Using PAN Number? Some of you might be searching for the easiest way of ‘how to get Form 16’, so here is the updated process for 2026. One document that you need beforehand is your PAN Number. In addition to PAN, salary slips and the TDS certificate issued (Form 16) are also important documents required for income verification and tax filing. If you are a salaried employee, you need Form 16 while filing ITR to comply with statutory deductions from your employers. PAN (Permanent Account Number) PAN is a 10-digit alphanumeric number issued by the Income Tax Department of Govt. of India to any person who has applied. This number links all the transactions of the person with the department that includes tax payments, TDS/TCS credits, returns of income, etc. Thus, PAN acts as an identifier for people with the tax department. Steps are as follows- Step 1: Login to TRACES website. Step 2: Sign up as a registered user with your PAN/AIN. Step 3: Go to the ‘Download’ tab and click ‘Form 16’ option. Step 4: Choose your financial year (2025-26 or relevant) and click ‘Search PAN download’ or ‘Bulk PAN downloads’. Step 5: When your details appear on the screen, click ‘Submit’ and fill KYC details. Step 6: You’ll get a reset number on your registered mobile number once you complete KYC. Step 7: Track the status of your Form 16 with the reset number and download Form 16 when it turns ‘Available’. Step 8: Select the format of your choice and download the form. Form 16 Types When you file your Income Tax Returns, you have to upload either of the Form 16 as mentioned below. So just to have clarity, which one to upload, have a look at both of them- Form 16-A TDS certificate for TDS on income-based salary. Form 16-A gives information like TDS deduction by banks from interest income of fixed deposits, TDS on commissions from insurance, TDS from rent payments, and other income subjected to similar deductions. Form 16-B TDS deducted during the sale of immovable property. Form 16-B acts as proof submitted to the government of TDS deducted on selling property (1% of the price paid to seller). How to File Income Tax Returns Online using Form 16? Now that you know how to download Form 16, here is the updated step-by-step process for filing your ITR for the financial year 2025-26. Form 16 is a crucial document for filing income tax returns, as it simplifies the tax filing and ITR filing process for salaried employees by providing all the necessary details required for accurate submissions and compliance. ITR (Income Tax Returns) As per the Income Tax laws of Govt of India, returns must be filed every year by an individual or business that earns any income (salary, business profits, income from property or capital gains, other sources during the financial year). To file your returns, you need to fill in the ITR form and attach your Form 16 as per the mandatory rules by the department. Form 16 plays a vital role in the filing income tax returns process, making tax filing easier and helping you claim refunds or deductions. Here is the updated step-by-step process to file ITR online using Form 16 for FY 2025-26: Tip: Before filing your ITR form, make sure you have all necessary documents ready- Form 16, copy of PAN and Aadhaar card, bank statements, and other relevant documents related to deductions. Step 1: If you are e-filing your returns for the first time, create your account on Income Tax portal. Step 2: Locate the e-file section and click on ‘Prepare and Submit Income Tax Return’ to start the process. Step 3: Based on your income and other factors, select the appropriate ITR form (ITR-1 or ITR-2) and assessment year (2026-27). Step 4: Enter the details like personal information, income details, deductions, and tax payments. Step 5: With the help of Form 16, fill the following details: Allowances exempt under Section 10. Break up of deductions under Section 16. Taxable salary. Income (or admissible loss) from house property reported by an employee and offered for TDS. Income under the head ‘Other Sources’ offered for TDS. Break up of Section 80C deductions. The aggregate of Section 80C deductions (gross and deductible amount). Tax payable or refund due. The filing process requires accurate entry of details from Form 16 to ensure compliance and facilitate financial transactions, such as loan applications or claiming deductions. Step 6: Upload and cross verify all the details you have entered in your ITR form and Submit. Step 7: E-Verify your ITR form using options like Aadhaar OTP, net banking, or other available methods. Congratulations! You have successfully filed your Income Tax Return. If you switched jobs during the financial year, ensure you collect Form 16 from each employer for the respective employment periods before filing your ITR. You can request Form 16 from your previous employer by sending an email or visiting their office. Top 20 Frequently Asked Questions (FAQs) on Form 16 What is Form 16?Form 16 is a certificate issued by employers as proof of Tax Deducted at Source (TDS) from salary income. Who issues Form 16?Only employers who deduct TDS from employees’ salaries issue Form 16. Is Form 16 mandatory for all salaried employees?Form 16 is issued only if TDS is deducted, usually when salary exceeds the basic exemption limit. What are the parts of Form 16?Form 16 consists of Part A (summary of TDS) and Part B (detailed salary and deductions). Can employees download Form 16 directly?No, only employers can download Form 16 from the TRACES portal and provide it to employees. What if I changed jobs during the year?You must collect Form 16 separately from each employer you worked for during the financial year. How does Form 16 help in filing Income Tax Returns?It provides salary details, TDS deducted, and deductions claimed, simplifying accurate tax filing. Can Form 16 be used as proof of income?Yes, it is accepted by financial institutions for loans and other financial transactions. What is the difference between Form 16 and Form 16A?Form 16 is for TDS on salary; Form 16A is for TDS on other income like interest or commission. When is Form 16 issued?Employers must issue Form 16 by June 15 following the end of the financial year. What if there is an error in Form 16?Inform your employer immediately to correct and reissue Form 16. Does Form 16 include non-salary income?No, Form 16 covers only salary income and related TDS. What details are included in Part B of Form 16?Part B includes salary breakup, allowances, deductions under Chapter VI-A, and taxable income. How does Form 16 affect tax refunds?It helps claim refunds if excess TDS was deducted during the year. Can Form 16 be used for loan approvals?Yes, banks often require Form 16 to verify income and tax compliance. What is the TRACES website?TRACES is the official portal where employers download and manage Form 16 after filing TDS returns. Is Form 16 required if no TDS was deducted?No, Form 16 is issued only when TDS has been deducted. Can I file ITR without Form 16?Yes, but having Form 16 makes filing easier and more accurate. What if I lose my Form 16?You can request a duplicate from your employer or have them download it again from TRACES. How is Form 16 linked to taxable income?Form 16 reflects TDS deducted based on your total taxable income and applicable tax slabs. Examples of Form 16 Usage Across Industries Finance Sector:A bank employee receives Form 16 showing gross salary, TDS deducted, and deductions like health insurance premiums. This helps in filing accurate tax returns and applying for loans. Manufacturing Industry:A factory worker’s Form 16 includes salary components such as basic pay and overtime, along with TDS details. This document is essential for tax filing and loan applications. Information Technology (IT):An IT professional’s Form 16 details salary, bonuses, and stock options. It assists in claiming deductions and filing tax returns efficiently. Form 16 is a vital document for salaried employees in all sectors. It provides a clear summary of salary income, tax deductions, and helps ensure accurate income tax return filing. Employers must issue Form 16 timely, and employees should verify its details carefully. Whether in finance, manufacturing, or IT, understanding Form 16 simplifies tax compliance and financial transactions. Submit. In case you switched your job, you need Form 16 of every employer for filing your ITR in the particular financial year. To get Form 16 from your previous employer, you can either send an email or visit their office to request your Form 16 before filing ITR. Conclusion This financial year 2025-26, empower yourself and your employees by sending them Form 16 rather than just telling them about Form 16 meaning on time with other relevant documents to file ITR. If you want to simplify your payroll process and automate various other operations, you can explore HROne!
