It’s almost May. Your Q4 24Q is about to be filed, the tax season is heating up, and every employee who’s filed an ITR before is going to start asking you the same question: “Sir/Ma’am, when is my Form 16 coming?”
For HR managers handling 50–500 employees, this is the one statutory document where a small mistake — wrong PAN, missing exemption, mismatched salary figures — can blow up into 50 angry emails and a notice from the Income Tax Department. Here’s how to issue Form 16 for FY 2025-26 the right way, before the June 15, 2026 deadline.
TL;DR — Form 16 for FY 2025-26 in 30 Seconds
- Deadline to issue Form 16 to employees: June 15, 2026 (15 days after the Form 24Q Q4 deadline of May 31)
- Form 16 has two parts: Part A (auto-generated from TRACES after 24Q is processed) and Part B (you prepare it from payroll data)
- Penalty: ₹100 per day per employee under Section 272A(2)(g) of the Income Tax Act, 1961
- From FY 2026-27, Form 16 will be renamed Form 130 under the Income Tax Act, 2025 — but for the salary you paid in FY 2025-26, the certificate is still called Form 16
What Is Form 16, and Who Has to Issue It?
Form 16 is the annual TDS certificate that every Indian employer must issue to every salaried employee from whom tax was deducted during the financial year. It’s governed by Section 203 of the Income Tax Act, 1961 and Rule 31(1)(a) of the Income Tax Rules, 1962.
In simple words: if you deducted even ₹1 of TDS from an employee’s salary between April 2025 and March 2026, you owe them a Form 16 by June 15, 2026.
A common question I get asked: “What if no TDS was deducted because the employee was below the threshold?” Technically, you’re not required to issue Form 16 in that case — but most companies issue it anyway as a salary certificate. Your employees use it to file ITR, apply for home loans, and process visas. Refusing to give it creates more friction than it’s worth.
Form 16 vs Form 130: Don’t Get Confused This Year
Under the new Income Tax Act, 2025 and the Income Tax Rules, 2026, the salary TDS certificate has been renamed Form 130 with effect from April 1, 2026. This applies to the next tax year — i.e., salary paid in FY 2026-27 (which the new law calls “Tax Year 2026-27”).
For the salary you paid between April 2025 and March 2026 — which is what you’re issuing right now — the certificate is still called Form 16. Don’t let any vendor or consultant talk you into “upgrading” early. Form 130 kicks in for next year’s certificates, due June 15, 2027.
The June 15, 2026 Deadline — and the Penalty for Missing It
The deadline math is simple:
| Activity | Due Date |
|---|---|
| Form 24Q Q4 filing (Jan–Mar 2026) | May 31, 2026 |
| Form 16 Part A available on TRACES | ~7–10 days after 24Q is processed |
| Form 16 issued to all employees | June 15, 2026 |
Miss June 15 and Section 272A(2)(g) imposes a penalty of ₹100 per day, per certificate, per employee. For a 200-person company, that’s ₹20,000 a day — and it keeps running until you issue. I’ve seen this fine slapped on companies that thought they could quietly push it to July. Don’t be that company.
If you haven’t filed Q4 24Q yet, start with our Form 24Q Q4 FY 2025-26 filing guide — Form 16 isn’t possible until 24Q is processed.
Step-by-Step: How to Generate and Issue Form 16
Step 1: Make sure Form 24Q Q4 is filed and processed
Form 16 Part A can only be downloaded from TRACES after your Q4 24Q return for January–March 2026 is filed and successfully processed. File 24Q on or before May 31. Then wait 7–10 working days for it to show as “Processed” in your TRACES dashboard. Until that happens, Part A simply will not exist.
Step 2: Log in to TRACES as a Deductor
Go to tdscpc.gov.in, log in as a Deductor using your TAN, user ID, and password. If you’ve forgotten the password, the reset takes 24–48 hours — start this in early May, not on June 14.
Step 3: Request Form 16 Part A
Navigate to Downloads → Form 16. Select FY 2025-26 (Quarter 4) and the type as “Salary”. You can pull Part A in two modes:
- Search PAN — for one or two specific employees
- Bulk PAN download — generates Part A for all employees in one shot (recommended)
Enter the token number, BSR code, challan amount, and CIN exactly as they appear in your filed 24Q. Any mismatch and TRACES will reject the request without a useful error message.
Step 4: Validate via KYC and download
You’ll be asked to validate using either Digital Signature or Normal KYC (where you re-enter challan details from the relevant quarter). Submit the request. Within 24–48 hours, TRACES will email you when Part A is ready. Download the ZIP file — it contains a separate Part A PDF for each employee, digitally signed by TRACES.
Step 5: Prepare Form 16 Part B
Part B is your responsibility, not TRACES’. It contains:
- Gross salary breakup (basic, HRA, special allowance, perquisites, profits in lieu of salary)
- Exemptions under Section 10 (HRA, LTA, etc.)
- Deductions under Chapter VI-A (80C, 80D, 80CCD(1B), and so on)
- Tax computation under the regime the employee opted for (old vs new)
- Any reliefs claimed under Section 89
Most modern HRMS and payroll software auto-generate Part B from the same data used for 24Q. If you’re still doing this in Excel, this is the year to stop — one transposed digit and you’ll be answering employee queries for weeks.
Step 6: Merge Part A + Part B and distribute
Combine Part A (from TRACES) and Part B (from payroll) into a single PDF per employee. Get it digitally signed by the authorized signatory using a Class 2 or Class 3 DSC. Distribute via:
- Encrypted email (password = first 4 letters of name in caps + DOB in DDMMYYYY, or any standard your HR policy specifies)
- Self-service portal on your HRMS (the cleanest method — employees download themselves and you have an audit trail)
- Physical copy, if your company policy demands it
Keep an acknowledgement of issuance — an email read-receipt or HRMS download log is enough for an audit.
Common Mistakes HR Managers Make With Form 16
In a decade of cleaning up Form 16 messes, the same five mistakes show up every June:
- Wrong PAN in 24Q. Even one digit wrong means no Part A for that employee. Run a PAN-Aadhaar verification on every employee in March itself, before you file Q4.
- Issuing Part B without Part A. Some companies email only the salary breakup and call it Form 16. It is not. Without the TRACES-signed Part A, it’s worthless for the employee’s ITR.
- Forgetting employees who left mid-year. You still owe Form 16 to anyone who was on payroll for even one month in FY 2025-26. Pull the full headcount from your HRMS, not just current employees.
- Old regime / new regime confusion. Issue Part B reflecting the regime the employee opted for at the start of FY 2025-26 (or the default new regime, if they didn’t opt). Don’t switch them mid-stream in Form 16.
- Mismatched salary figures between Part A and Part B. Part A shows what TRACES has from your 24Q; Part B is from payroll. If they don’t match, the employee will get a tax notice and you’ll get a frantic phone call. Reconcile before you issue.
What About Employees Who Left During FY 2025-26?
Yes, you must issue Form 16 to them too. The Income Tax Act doesn’t distinguish between current and ex-employees. Send it to the personal email on record, not the now-disabled work email. If you don’t have a personal email, use the registered postal address and keep proof of dispatch.
This is also a good reason to update your onboarding and exit checklists — collecting a personal email and current address at exit saves you the June scramble next year.
Form 16 FAQs for FY 2025-26
Can I issue Form 16 before May 31 if I file 24Q early?
No. Even if you file 24Q early, Part A generation depends on TRACES processing the return. The earliest Part A typically becomes available is in the first week of June 2026, regardless of when you filed.
What if an employee earned less than ₹2.5 lakh and no TDS was deducted?
Strictly, Form 16 is only mandatory when TDS has been deducted. But it’s good practice to issue a salary certificate in the same format. Most ITR utilities accept this for nil-tax filers, and your employee will thank you when they apply for a home loan.
Can Form 16 be issued without a digital signature?
Yes, a manually signed Form 16 is valid. But for any workforce above 50 people, DSC-based signing or e-Sign is faster, fully traceable, and accepted by every tax portal. Manual signing for 200 employees is a recipe for missed deadlines.
How do I correct a Form 16 already issued with errors?
File a Form 24Q correction return with the corrected data, wait for TRACES to process it (another 7–10 days), then download the revised Part A and re-issue Form 16 with a “Revised” notation. Notify the employee in writing so they don’t file ITR using the old version.
Is Form 16 needed if the employee opted for the new tax regime?
Absolutely yes. The new regime doesn’t remove the TDS certificate requirement — only the deductions you compute change. Part B will simply reflect the simpler new-regime computation, with the standard deduction and minimal other deductions.
What standard deduction should I show in Part B for FY 2025-26?
For salaried employees under the new regime in FY 2025-26, the standard deduction is ₹75,000. Under the old regime, it remains ₹50,000. Reflect whichever applies based on the regime your employee chose.
Get Form 16 Out Before June 15
Form 16 isn’t complicated, but it’s unforgiving — every error gets multiplied by your headcount. Start the moment you file 24Q on or before May 31, build in two weeks for TRACES processing and reconciliation, and aim to distribute Form 16 by June 10 so you have a five-day buffer for last-minute corrections.
If you’re still juggling this in spreadsheets, EZHRM’s payroll and tax module auto-generates Form 16 Part B from your monthly payroll data and pushes the merged certificate to employees through a self-service portal. Most of our clients finish full distribution within 48 hours of Part A becoming available.
Sources for current rules and rates: Income Tax Department and TRACES (TDS-CPC).