Form 16 is a crucial Tax Deduction at Source (TDS) certificate issued by employers to salaried employees. It summarizes the salary paid and TDS deducted during the financial year. Here’s everything you need to know about Form 16 for FY 2024-25 (Assessment Year 2025-26).

1. What is Form 16?

• It is a TDS certificate under Section 203 of the Income Tax Act, 1961.
• Contains details of salary income, deductions, and tax deducted by the employer.
• Mandatory for employers who deduct TDS from employees’ salaries.

2. Who Should Get Form 16?

• All salaried employees whose employer deducts TDS.
• Employees with taxable income above the basic exemption limit (₹3 lakh under new tax regime, ₹2.5 lakh under old regime).
• Even if no TDS was deducted, employees can request a salary summary.

3. Components of Form 16 (FY 2024-25)

Form 16 has two parts:

Part A – Employer & Employee Details

     ✔ Employer’s name, TAN, PAN, and address
     ✔ Employee’s PAN, name, and employment period
     ✔ Summary of salary paid & TDS deducted
     ✔ TDS deposited with the government (Quarterly breakdown)

Part B – Salary Breakdown & Tax Computation

Gross Salary (Basic, HRA, DA, Allowances, Bonus, etc.)
                      ✔ Exemptions & Deductions (HRA, LTA, Standard Deduction, etc.)
                      ✔ Taxable Income Calculation
                      ✔ Tax Payable (Old vs. New Tax Regime)
                      ✔ Rebates (Section 87A) & Surcharge (if applicable)

4. Key Changes in Form 16 for FY 2024-25

• New tax regime as default option (employers may ask for preference).
• Higher standard deduction (₹50,000 for salaried employees) under both regimes.
• Updated tax slabs under the new regime (if any changes announced).
• Digital Form 16 (TRACES-generated) is mandatory for employers.

5. Importance of Form 16 for ITR Filing

• Mandatory for salaried taxpayers filing ITR-1 or ITR-2.
• Helps claim TDS refunds if excess tax was deducted.
• Reduces errors in income reporting.

6. Form 16 vs Form 16A – Difference

Conclusion

     Form 16 is a critical document for salaried employees to file accurate ITR. Ensure you collect it from your employer by June 15, 2025, verify details, and use it to compute your tax liability correctly.