Lesson 2 of 3 · 6 min
Form 16, decoded
The certificate your employer owes you by 15 June, in two parts: Part A proves the tax reached the government, Part B shows how the figure was arrived at.
Form 16 is the certificate of the TDS your employer deducted from salary, due to you by 15 June after the tax year ends. It comes in two parts, and they answer different questions: Part A proves the money reached the government; Part B shows the arithmetic behind the deductions from your payslip.
| Aspect | Part A | Part B |
|---|---|---|
| What it shows | TDS deposited against your PAN, quarter by quarter, with the employer's TAN | Salary breakup, exemptions, deductions and the tax computation |
| Where it comes from | Downloaded from the TRACES system — it reflects government records | Prepared by your employer's payroll |
| What to check | Your PAN is correct and the quarterly amounts match your payslips | The regime used, and that every deduction shown is one you actually made |
The actual document
Part B, and the three lines an employer most often gets wrong
Meridian Systems India Pvt Ltd
Form 16 Part B · Assessment Year 2027-28
- Employee PAN
- ABCDE1234F
- Employer TAN
- BLRM12345C
- Period
- 01/04/2026 – 31/03/2027
- Regime applied
- New
Gross salary
- Salary under section 17(1)₹15,40,000
- Perquisites under section 17(2)₹60,000
- Gross salary₹16,00,000
Deductions under section 16
- Standard deduction, s.16(ia)₹75,000
- Professional tax, s.16(iii)₹0
- Total deductions₹75,000
Tax on that income
- Tax at slab rates₹1,08,750
- Health and education cess at 4%₹4,350
- Tax deducted and deposited₹1,13,100
A fictional Form 16. Part A comes from TRACES and proves the ₹1,13,100 reached the government; Part B, above, is your employer showing their working.
Tap a numbered marker to see what that line means.
- 1
Perquisites under section 17(2). Non-cash benefits valued in rupees and taxed as salary — a company car for personal use, rent-free accommodation, a concessional loan. You never received ₹60,000; you are taxed as though you did.
- 2
Standard deduction, s.16(ia). Flat, automatic, no proof needed, and larger under the new regime than the old one. Nobody has to claim it — if it is missing from your Part B, the arithmetic below it is wrong.
- 3
Professional tax, s.16(iii). A zero on purpose. Professional tax is deductible only under the old regime, and this Part B applies the new one — so the ₹2,500 the state took is not deductible here. This is the line to check first when a regime has been switched.
- 4
Tax at slab rates. Nil to ₹4 lakh, then 5% to ₹8 lakh, 10% to ₹12 lakh, 15% above. Only the slice inside each band pays that band’s rate — the whole income is never taxed at the top rate reached.
- 5
Total income. Gross salary less the section 16 deductions. This is the figure your return has to agree with — and the figure the department already holds, because Part A of the same form was filed with them.
Put these in order
Form 16 just landed in your inbox. Put the checks in a sensible order.
- File the form away — the ITR asks for these figures
- Check every deduction in Part B is real, not just declared
- Check which regime Part B assumed
- Match Part A's quarterly TDS against your payslips
- Confirm the PAN on it is actually yours
Quick check
Part A of Form 16 shows ₹48,000 deposited, but your payslips add up to ₹52,000 deducted. What does that mean?
Check yourself
1 / 3
Kabir asks
Which part of Form 16 proves the money actually reached the government?
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