Form 16 generation
Generate Form 16 salary TDS certificates — Part A and Part B details, generation steps, status tracking, and distribution
Form 16 generation
Form 16 is the annual TDS certificate you issue to employees summarizing their salary, tax deductions, and deposits for the financial year. The app generates Part B with salary breakup, exemptions, and tax computation, and produces downloadable PDFs.
Prerequisites
Before generating Form 16, complete these steps:
- Process all monthly payroll for the financial year (April through March)
- Deposit all TDS to the government and record challan details. See TDS challans.
- File Form 24Q for all four quarters, especially Q4 which includes annual salary data. See Form 24Q.
- Collect investment proofs from employees for any deductions or exemptions claimed
Part A — TDS deposit details
Part A contains the employer's and employee's identifying details along with a quarter-wise summary of TDS deducted and deposited.
| Field | Description |
|---|---|
| Employer name, TAN, PAN, address | Your company's details as the deductor |
| Employee name, PAN | The employee's identifying details |
| Period of employment | Start and end dates during the financial year |
| Quarter-wise TDS summary | TDS deducted and deposited for Q1, Q2, Q3, Q4 |
| Challan details | BSR code, deposit date, and serial number for each quarter's deposit |
Note: Part A is officially generated and downloaded from the TRACES portal after filing all quarterly Form 24Q returns. It carries a system verification that ensures authenticity.
Part B — Salary and tax computation
Part B details the employee's salary, exemptions, deductions, and the complete tax calculation. The app generates Part B from your payroll data.
Salary details
| Component | Description |
|---|---|
| Basic salary | Base pay for the financial year |
| House Rent Allowance (HRA) | HRA received; exemption calculated under Section 10(13A) |
| Special allowance | Any additional allowances |
| Other components | Bonus, commission, perquisites, etc. |
| Gross salary | Total of all components |
Exemptions and deductions
| Deduction | Description |
|---|---|
| Standard deduction (Section 16(ia)) | ₹75,000 (new regime, FY 2025-26) |
| HRA exemption (Section 10(13A)) | Lower of: actual HRA, rent paid minus 10% of basic, or 40%/50% of basic |
| Section 80C | Employee PF, LIC, ELSS, PPF (up to ₹1,50,000) |
| Section 80D | Medical insurance premiums |
| Other deductions | 80G donations, 80E education loan interest, etc. |
Tax computation
| Step | Description |
|---|---|
| Total income | Gross salary minus exemptions and deductions |
| Tax on income | Calculated using new regime slab rates |
| Rebate under Section 87A | Up to ₹60,000 if taxable income does not exceed ₹12,00,000 |
| Surcharge | 10% above ₹50 lakh; higher tiers above ₹1 crore; capped at 25% under new regime |
| Health & Education Cess | 4% on tax plus surcharge |
| TDS deducted | Quarter-wise TDS (Q1 + Q2 + Q3 + Q4) |
See TDS calculation for a worked salary tax example.
Generating Form 16
Bulk generation
- Go to Payroll > TDS > Form 16.
- Select the financial year.
- Click Initialize All.
- The system generates Part B for every employee who had TDS deducted during the year.
- Review the summary cards showing counts for Pending, Generated, and Sent certificates.
Individual download
- On the Form 16 page, find the employee in the table.
- Click the Download icon next to their name.
- The system generates a PDF containing Part B with the employee's salary breakup, exemptions, deductions, and tax computation.
Status tracking
Form 16 certificates move through three states:
| Status | Meaning |
|---|---|
| Pending | Certificate not yet generated |
| Generated | PDF created and ready for review or download |
| Sent | Certificate emailed to the employee |
Downloading and distributing
- Individual download — click the Download icon next to an employee's name to save the PDF.
- Email distribution — click the Email icon to send the certificate to the employee's registered email. The status updates to Sent with a timestamp.
Issuance deadline
You must issue Form 16 to employees by 15th June following the end of the financial year. For FY 2025-26, the deadline is 15th June 2026.
Late issuance attracts a penalty of ₹100 per day under Section 272A(2)(g), capped at the TDS amount.
Related articles
- Form 24Q — the quarterly salary TDS return you file before generating Form 16
- TDS calculation — how salary TDS is computed using slab rates
- TDS challans — depositing TDS before certificate generation
- TDS returns — quarterly return filing process
- TDS overview — complete TDS compliance workflow