Form 130 (Earlier Form 16) Explained: Part A, Part B, and Common Errors
Form 130, earlier Form 16, is the annual TDS certificate an employer issues to each employee by 15 June. Part A, from TRACES, shows tax deducted and deposited by quarter and must match the annual tax statement (Form 168). Part B, prepared by the employer, shows salary, exemptions, deductions and taxable income.
Form 130, earlier known as Form 16, is the annual certificate of tax deducted at source on salary. Employers issue it to every employee from whom they deducted tax, by 15 June after the end of the year. It has two parts, and each does a different job.
Which form applies when
The Income-tax Act, 2025 applies from 1 April 2026, and Form 16 became Form 130 under the Income-tax Rules, 2026. Certificates for 2025-26 and earlier years stay Form 16. Form 130 covers salary paid from 1 April 2026, so the first ones are due after the 2026-27 year closes.
Part A and Part B
| Part A | Part B | |
|---|---|---|
| What it shows | Tax deducted and deposited, quarter by quarter | Salary breakup, exemptions, deductions and tax computation |
| Prepared by | Generated from the TRACES portal | Prepared by the employer |
| Key details | Employer TAN and PAN, employee PAN, challan details | Gross salary, exemptions, deductions under Section 123 (earlier 80C) and others, taxable income |
| Must match | The annual tax statement, now Form 168 (earlier Form 26AS) | The employee's tax return |
How to read it
- Check your name, PAN and the employer's TAN.
- In Part A, see the total tax deducted and the quarterly details.
- In Part B, compare gross salary with your payslips and see which exemptions and deductions were counted.
- Compare the tax deducted with what appears in your annual tax statement.
Why mismatches happen
The most common complaint at filing time is that the tax in the certificate does not match the credit on the portal. It is usually caused by a late or wrong deposit by the employer, or a wrong PAN, not by anything the employee did.
Common errors in Part B
- ✓A declared investment that was left out
- ✓The wrong tax regime applied
- ✓An incorrect HRA exemption
- ✓Income from a previous employer not included
- ✓Perquisites missed or valued wrongly
What employers should do
- ✓Reconcile TDS deducted, deposited and reported every quarter.
- ✓Keep declarations (Form 124, earlier Form 12BB) and proofs in one system, with the regime recorded for each employee.
- ✓Check PANs before filing the quarterly return, which is now Form 138.
- ✓Issue the certificate on time, with a way for employees to ask for corrections.
What employees should do
- ✓Compare the certificate with the tax statement before you file.
- ✓If the figures differ, ask your employer to correct the quarterly return, and file after the credit appears.
- ✓Keep the certificate from every employer you worked for in the year.
Related reading
See TDS on salary and Form 138 and Form 140 explained.
Sources
Written by
HR Manager, Airwix Technologies (Sleet)
Nihit Dobariya is the HR Manager at Airwix Technologies in Ahmedabad, where he runs HR and payroll for the team behind Sleet. He writes about payroll, PF and ESIC, professional tax, the labour codes and everyday HR practice for Indian employers, and checks each rule against the official notification before it is published.
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