Form 16 Part B: Employer's Guide for FY 2025-26

Form 16 is the certificate of deduction of tax at source issued by employers. Part A contains the summary of tax deducted and deposited (generated via TRACES), while Part B is an annexure detailing the salary breakup and deductions.

The Default "New Regime"

As of recent financial years, the New Tax Regime (Section 115BAC) is the default. If an employee does not explicitly opt for the Old Regime at the start of the year, employers must calculate TDS based on the new slab rates.

Under the New Regime, most Section 10 exemptions (like HRA and LTA) and Chapter VI-A deductions (like 80C, 80D) are not allowed. However, the Standard Deduction of ₹50,000 remains applicable in both regimes.

Responsibility of the Employer

It is the employer's statutory duty to issue Form 16 by June 15th of the assessment year. Failing to provide this accurate breakdown can lead to penalties and makes it incredibly difficult for the employee to file their Income Tax Return (ITR).