Form 16 becomes Form 130 for salaried employees from April 1, 2026: All key FAQs you need to know

Under the Income-tax laws, it is mandatory for employers to deduct tax on employees' salaries in advance and deposit it with the Income-tax department. Every year, employers issue a certificate in the form of Form 16 to employees, which helps them file their income-tax returns. While this has been the practice under the Income-tax Act, 1961, Form 16 is set to be replaced by Form 130 under the Income-tax Act, 2025, which comes into effect from April 1, 2026. Here's everything employees need to know about the transition:

The first Form 130 will be issued by June 15, 2027 and it will include details of tax deducted for Tax Year 2026-27.

In June 2026, employees will receive Form 16 with details of tax deduction for FY 2025-26.

Form 130 is same as Form 16 in terms of the purpose it serves. In the words of the Income-tax Department, "Form No. 130 is a certificate for Tax Deducted at Source (TDS) issued annually by an employer to a salaried employee or a pensioner."

Like Form 16, Form 130 will also provide a detailed summary of the salary earned, tax deducted and deposited, and applicable deductions.

Form 130 certifies and serves as proof that tax has been deducted from salary income and deposited with the Government.

Form 130 is also applicable to interest income earned by specified senior citizens as per provisions of section 402(39) of the Income-tax Act, 2025. Such certificate enables the deductee to claim credit of TDS deducted and deposited on their behalf by the deductor.

There are three parts of Form 130:

Part A: This includes details of the employer/specified bank and details of the employee/specified senior citizen to whom Form 130 is to be issued.

Part B: This contains details of amount paid/credited and tax deducted at source.

Part C: This has two annexures:

• Part C (Annexure-I): It is applicable where tax is deducted from salary income of employees. This includes a detailed computation of taxable income like break-up of gross salary, exemptions, deductions, total taxable income, tax payable, relief under section 157, TDS/TCS paid, Net Tax Payable, etc

• Part C (Annexure-II): It is applicable to specified senior citizens and includes pension income details, interest income under the head “Other Sources” paid by the specified bank, deductions, total taxable income, tax payable, relief under section 157, net tax payable, etc.

Yes. The tax department says that an employee can have multiple Form 130 of s/he has worked with more than one employer. Each employer is required to issue a separate certificate (Part A and B of Form 130) to such employees. However, However, Part C (Annexure-I) can be issued either by each employer or the last employer and Part C (Annexure-II) is required to be issued by Specified Bank to a Specified Senior Citizen.

A deductor can also issue a duplicate certificate in Form No. 130 if the deductee has lost the original certificate.

No.

Yes. The Income-tax Department says Form 130 must be preserved for purpose of records.

Corrections in Form 130 can be made. For this, employer must file a revised TDS statement in Form No. 138, within the stipulated time.

"Once the revised TDS statement is processed, the employer can download and issue the corrected Form No. 130 to the employee," the tax department says.

The due date for employers to issue Form 130 of a tax year is June 15. "The due date for issuance of Form No. 130 is by the 15th June of the Financial Year immediately following the Tax Year in which the income was paid and tax was deducted," the tax department says.

Yes. It is mandatory.

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