TDS Certificate On Salary: Form 16 Is Now Form 130

Form 16 is the one tax document nearly every salaried employee actually recognizes by name. It is the certificate an employer hands over each year confirming how much salary was paid and how much TDS was deducted against it. Under the new Act, this certificate keeps doing the same job, under a new number, and with one structural addition that HR and payroll teams need to plan for.

Old form: Form 16, issued under Section 203 of the Income Tax Act, 1961

New form: Form 130, issued under the salary TDS provisions of the Income Tax Act, 2025, corresponding to Form 138 filings, applicable from Tax Year 2026-27 onwards

What the Certificate Covers

Form 16, and now Form 130, is the annual TDS certificate an employer issues to each employee, summarizing salary paid and tax deducted during the financial year. It has traditionally had two parts:

• Part A: summary details, employer and employee PAN and TAN, the period of employment, and a quarter-wise summary of TDS deducted and deposited, generated and downloaded through the TRACES portal
• Part B: the detailed annexure, showing gross salary, exemptions claimed, deductions under Chapter VI-A, and the final tax computation, prepared by the employer directly

Employees rely on this certificate as the primary supporting document when filing their own ITR, cross-checking it against Form 26AS or its successor to confirm the TDS credit claimed matches what the employer actually deposited.

What Actually Changed

• Form number: 16 becomes 130
• Underlying return reference: since the salary TDS return itself moved from Form 24Q to Form 138, the certificate generated from that return naturally carries the new numbering and section references tied to Section 392 of the new Act
• Three-part structure: Form 130 is structured with three parts instead of the traditional two. The added third part is tied to the same expansion that brought pension and senior citizen interest reporting into the salary TDS return itself, through Annexure III of Form 138. Where applicable, Form 130 now carries a corresponding section reflecting this pension or interest component alongside the traditional salary breakup
• Deduction and exemption references updated: Part B style computation continues to show deductions and exemptions, now cross-referenced to the new Act's provisions and Schedule II in place of the old Chapter VI-A and Section 10 references
• Issuance deadline unchanged: June 15 following the end of the financial year continues to be the deadline for employers to issue this certificate to employees

The core content an employee actually reads, gross salary, exemptions, deductions, and net tax deducted, has not changed in substance. The structural addition of a third part is the one genuine change worth flagging, particularly for employers who also happen to be specified banks paying pension income, where the certificate needs to reflect that additional reporting layer.

Worked Example

Old position, Form 16, applicable for FY 2025-26:

Ms. Fernandes, a salaried employee, receives her Form 16 for FY 2025-26 from her employer in June 2026. Part A shows her PAN, her employer's TAN, and the quarter-wise TDS summary totaling Rs. 1,20,000 deducted across the year. Part B shows her gross salary of Rs. 14,00,000, standard deduction, deductions claimed under the old Chapter VI-A for investments and insurance premiums, and the final tax liability matching the TDS already deducted. She uses this certificate to cross-check her Form 26AS and files her ITR accordingly.

New position, Form 130, applicable from FY 2026-27:

Ms. Fernandes receives her certificate for FY 2026-27 in June 2027, now labeled Form 130. Part A shows the same PAN, TAN, and quarter-wise TDS summary structure, now referencing Section 392 and the Form 138 filings underlying it. Part B shows her gross salary, standard deduction, and deductions now cross-referenced to Schedule II and the new Act's deduction provisions instead of old Chapter VI-A. Since her employer does not pay pension income, the third part of Form 130 remains not applicable to her certificate specifically, but the structure exists in the form regardless. She cross-checks the certificate against her Form 168, the successor to Form 26AS, using the same reconciliation process as before, just against a differently numbered set of documents.

Why This Matters for Filing

• Update client-facing checklists and onboarding documents to refer to Form 130 instead of Form 16 for FY 2026-27 income onwards, while keeping Form 16 references accurate for any prior year documents still being reconciled or referenced in ongoing assessments.
• Employers who also function as specified banks paying pension or senior citizen interest income should confirm their payroll or TDS software correctly populates the third part of Form 130 where applicable, since this is a genuinely new structural element beyond a simple renumbering.
• The June 15 issuance deadline has not moved, so payroll teams should not treat this renumbering as a reason to revisit filing timelines, only the certificate format and underlying references.
• When reconciling a client's TDS credit, continue matching the certificate, whether Form 16 for older years or Form 130 going forward, against the corresponding annual tax statement, Form 26AS or Form 168, as the authoritative cross-check, since the reconciliation principle itself has not changed.

Bottom Line

Form 16 has become Form 130, carrying forward the same core purpose, proof of salary paid and tax deducted, that every salaried employee has relied on for years. The certificate now has three parts instead of two, reflecting the broader pension and senior citizen interest reporting folded into the underlying salary TDS return. For most employees, the certificate will look and read almost identically. The structural change matters most for employers who also handle pension payments, and for anyone updating internal documentation to reference the correct form name for the correct financial year.