If you are looking for Form 16, there are two answers depending on which year you mean, and the difference matters this year for the first time in six decades.
For FY 2025-26, Form 16 is still the correct certificate, and it was due to employees by 15 June 2026. From Tax Year 2026-27 onwards it is replaced by Form 130 under the Income-tax Act, 2025 — a renamed, restructured, three-part certificate that cannot be prepared offline. The first Form 130 falls due on 15 June 2027.
The purpose has not changed. It is still the employer's certificate of salary paid and tax deducted and deposited against the employee's PAN, and it is still what an employee uses to file their return. What changed is the name, the structure, the statutory basis, and how it is produced.
| Last year of Form 16 | FY 2025-26 (due 15 Jun 2026) |
| First year of Form 130 | Tax Year 2026-27 (due 15 Jun 2027) |
| Structure | Three parts (A, B, C) + annexures |
| How it is produced | TRACES only, after Form 138 is filed |
| Quarterly return that feeds it | Form 138 (was Form 24Q) |
| Employee's tax statement | Form 168 (was Form 26AS) |
Position stated as at July 2026, under the Income-tax Act, 2025 and the Income-tax Rules, 2026, both effective from 1 April 2026.
Has Form 16 been discontinued?
Not retrospectively, and not yet in practice. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 with effect from 1 April 2026, and with it the whole family of TDS forms was renumbered. But the certificate you issue in June 2026 relates to salary paid during FY 2025-26 — a year governed by the old Act — so that certificate is Form 16.
The switch is therefore a June 2027 event for most employers, not a June 2026 one. What is not a 2027 event is the quarterly return: Form 138 replaced Form 24Q from the quarter ended 30 June 2026, so your filings changed months before your certificates do.
What the certificate actually is
Whatever it is called, this document records two things: the salary paid to the employee during the year, and the tax deducted at source from that salary and deposited with the government on the employee's behalf. It is the employer's formal statement — here is what we paid you, and here is the tax we withheld and remitted for you.
Because it certifies the TDS, it is the primary document an employee uses to file their return. It supplies the salary-income figure and the tax-already-paid figure that feed straight into the return.
Form 16's two parts, Form 130's three
| Form 16 (to FY 2025-26) | Form 130 (from TY 2026-27) | |
|---|---|---|
| Structure | Two parts | Three parts, plus annexures |
| Part A | Employer and employee identifiers (TAN, PAN), period of employment, quarter-by-quarter summary of TDS deducted and deposited | Identifying and employment details |
| Part B | Salary breakdown, exemptions and deductions claimed, taxable income, tax computed | Summary of tax deducted and deposited |
| Part C | — | Detailed salary computation |
| Generated from | TRACES, after Form 24Q filings | TRACES only, after Form 138 filings — cannot be prepared offline |
| Pre-filling | Part A from filed returns | Substantially pre-filled from the quarterly filings |
| Year concept | Previous year / assessment year | Single "tax year" |
| Covers | Salary only | Salary, and pension and interest for specified senior citizens via annexure |
The three-part split is not cosmetic. Under Form 16 the salary working and the TDS summary were bundled into Part B and Part A respectively; Form 130 separates the identity, the tax summary and the detailed computation, and pre-fills more of it from what you already filed. Less room for a certificate to disagree with the return that produced it — which was the single most common Form 16 problem.
The section renumbering that comes with it
If you maintain payroll templates, employee communications or an investment-declaration form that cite section numbers, they all now cite a repealed Act. The mapping every payroll team needs:
| Subject | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
| TDS on salary | s.192 | s.392 |
| TDS on non-salary payments | s.194 series | s.393 |
| Tax collected at source | s.206C | s.394 |
| Rebate for individuals | s.87A | s.156 — sub-section (1) old regime, sub-section (2) new regime |
| Standard deduction | s.16(ia) | s.19(1) |
| Investment deductions (80C etc.) | Chapter VI-A | Chapter VIII, s.123 onwards |
| New tax regime | s.115BAC | s.202 |
| Salary TDS certificate | Form 16 | Form 130 |
| Quarterly salary TDS return | Form 24Q | Form 138 |
| Consolidated tax statement | Form 26AS | Form 168 |
The rates, slabs, standard deduction and rebate limits themselves did not change. Only the numbering, the structure and the forms.
How Form 130 gets produced
This is the operational change that catches employers out, because it removes a fallback that existed before.
- You deduct TDS on salary each month under s.392 and deposit it by the seventh of the following month.
- You file the quarterly salary TDS return, Form 138, for each of the four quarters.
- Once the fourth-quarter Form 138 has been processed, you place a request on TRACES to download Form 130.
- You issue the downloaded certificate, signed, to each employee by 15 June.
Form 130 is auto-generated from what you filed. It cannot be manually prepared. Which means an error in Form 138 does not merely cause a mismatch later — it blocks or corrupts the certificate itself. The quarterly return has become the load-bearing filing, and the certificate is a downstream artefact of it. See Form 138: the quarterly salary TDS return.
Who must issue it, and to whom
The obligation falls on any employer who deducted TDS from an employee's salary during the year. If you deducted, you must issue.
Where no TDS was deducted — an employee whose income fell below the taxable threshold — the formal obligation is tied to deduction having occurred, so it does not apply in the same way. Many employers issue to everyone regardless, as good practice, because employees want the document for loan applications and visa filings whether or not tax was withheld.
Two situations worth handling deliberately:
- Employees who left mid-year. The certificate covers their exact period of employment. Get the employment-period field right; it is the field most often wrong on a leaver's certificate.
- Employees with more than one employer in the year. Each employer issues its own certificate for its own period. The employee collects both.
Deadlines, and what lateness costs
| Obligation | Due |
|---|---|
| Monthly TDS deposit | 7th of the following month |
| Quarterly return (Form 138) | 31 July, 31 October, 31 January, 31 May |
| Annual certificate (Form 16 / Form 130) | 15 June following the year |
Late issuance of the certificate attracts a per-day, per-certificate penalty, and late filing of the quarterly return attracts a per-day fee. Under the 1961 Act the late-issuance and late-filing fees were ₹100 and ₹200 per day respectively. Under the Income-tax Act, 2025 the late-filing fee for the return is Section 427 and the penalty for non-filing or incorrect filing is Section 461, with the old sections still governing periods up to 31 March 2026.
What the employee should check
The certificate should reconcile with the employee's consolidated tax statement — Form 168, which replaced Form 26AS and aggregates all TDS credited against their PAN from every source. A mismatch almost always traces back to the employer's quarterly return: a wrong PAN, a wrong quarter, or a challan not correctly mapped.
Worth telling employees to check this before filing rather than after, because a mismatch discovered after filing means a revised return.
What to do before June 2027
- Stop filing Form 24Q for salary. From Tax Year 2026-27 it is Form 138 for all four quarters.
- Confirm your payroll software generates Form 130, not Form 16, for TY 2026-27 salary — including the third part.
- Dry-run the TRACES download before June 2027. Discovering the request workflow for the first time in the fortnight before the deadline is avoidable.
- Validate PANs now. An incorrect PAN breaks the link between the deposit and the employee's record, and under the new flow it also corrupts the pre-filled certificate.
- Update your templates and declaration forms for the new section numbers. An investment-declaration form headed "Chapter VI-A" is citing a repealed statute.
- Brief payroll staff on the new numbering — ss.392, 156, 19(1), 202, 123 — before the first quarterly filing, not after.
Recurring problems
- Issuing late, and holding up employees' filings.
- Errors in the salary computation that do not reconcile with what was actually paid.
- Mismatches between the certificate and the employee's consolidated statement, traceable to the quarterly return.
- Incorrect PAN, breaking the linkage between the tax deposited and the employee's record.
- Inconsistency between the certificate and the payslips issued through the year.
- Wrong employment period for leavers.
- Assuming the certificate can still be prepared offline if TRACES is uncooperative. Under Form 130 it cannot.
Why this depends on connected payroll
The certificate is the end product of a year of payroll and four quarterly returns, and Form 130 makes that dependency unforgiving — it is generated from your filings, so it inherits every error in them and cannot be corrected by hand. When payroll runs on one database, the certificate, the quarterly returns and every monthly payslip derive from the same salary and TDS history, so they reconcile by construction rather than by year-end assembly. That is how Helion handles Indian payroll: one source of truth behind the payslip, the return and the certificate.
This guide reflects the position as at July 2026, under the Income-tax Act, 2025 and the Income-tax Rules, 2026, effective from 1 April 2026. Form and section numbering, certificate formats, penalty provisions and issue deadlines are set by the tax authority and can change. Form 16 remains the applicable certificate for FY 2025-26. This is general information for employers and employees, not a substitute for advice from a qualified chartered accountant on a specific situation.
Frequently asked questions
Has Form 16 been replaced?
Yes, from Tax Year 2026-27. Form 130 replaces Form 16 under the Income-tax Act, 2025, which took effect from 1 April 2026. Form 16 remains the correct certificate for FY 2025-26 and was due by 15 June 2026; the first Form 130 falls due on 15 June 2027.
What is Form 130?
Form 130 is the annual salary TDS certificate under the Income-tax Act, 2025. It records the salary paid to an employee during the tax year and the tax deducted at source and deposited against their PAN. It has three parts — identifying details, the TDS summary, and the detailed salary computation — plus annexures, against Form 16's two parts.
What is the difference between Form 16 and Form 130?
Form 130 has three parts rather than two, is substantially pre-filled from the employer's quarterly filings, is generated from TRACES only and cannot be prepared offline, uses the single tax-year concept rather than previous year and assessment year, and also covers pension and interest for specified senior citizens via annexure. The purpose of the certificate is unchanged.
When is Form 130 due?
By 15 June following the end of the tax year — the same deadline Form 16 carried. The first Form 130, for Tax Year 2026-27, is due by 15 June 2027.
Can Form 130 be prepared manually?
No. It is generated on TRACES from the data in the employer's quarterly Form 138 filings, after the fourth-quarter return has been processed. This is a significant change from Form 16, because an error in the quarterly return now blocks or corrupts the certificate rather than merely causing a mismatch to be resolved later.
Which section governs TDS on salary under the new Act?
Section 392 of the Income-tax Act, 2025, replacing Section 192 of the 1961 Act. Related renumbering: the rebate formerly under Section 87A is now Section 156, the standard deduction is under Section 19(1), investment deductions formerly in Chapter VI-A are now in Chapter VIII from Section 123, and the new tax regime is Section 202.
What replaced Form 26AS?
Form 168, the consolidated tax statement or annual tax passbook, which aggregates all TDS credited against an employee's PAN. Employees should reconcile their certificate against Form 168 before filing their return, since a mismatch usually traces back to the employer's quarterly filing.
Do employers have to issue a certificate if no TDS was deducted?
The obligation is tied to TDS having been deducted, so where no tax was withheld it does not apply in the same way. Many employers issue to all employees regardless, because employees often need the document for loan and visa applications whether or not tax was withheld.