Statutory and compliance
Form 16: the certificate that proves salary and tax paid
Form 16 is the certificate an employer gives a salaried employee after the financial year closes, showing the salary paid, the tax deducted from it and the tax deposited with the government. It comes in two parts. Part A is pulled from the tax department's system, and Part B sets out how the taxable salary figure was arrived at.
Last reviewed: September 2026
Also called: form 16, TDS certificate, form sixteen
In plain English
A yearly statement from the company saying how much it paid a person and how much tax it took out and sent to the government. The person uses it to file returns.
How it works in detail
The two parts come from different places, which is why one of them cannot be typed up in the office. Part A is generated by the tax department's own system out of the quarterly statements the employer filed, and it carries both parties' identifiers and the tax deposited quarter by quarter. Part B is prepared by the employer and shows the salary breakup, the exemptions and deductions allowed, the taxable figure and the tax worked out on it.
Employees need it for more than filing. A bank asks for it against a home loan, and a new employer reads the previous one to carry the year's tax forward. Only a person from whom tax was deducted has one coming; with no deduction there is nothing for Part A to report. The date by which it has to be issued sits in the rules, so ask your accountant for this year's.
A worked example
The setup
Say Vikram earned INR 6,42,000 in salary across the financial year, and his employer deducted tax from every month's pay before the books closed in March.
The calculation
Part A totals the deposits: INR 4,650.00 in each of four quarters, so 4 x INR 4,650.00 = INR 18,600.00 for the year. Part B opens at INR 6,42,000, subtracts the exemptions and deductions Vikram proved, and shows the tax on what remains.The result
Vikram gets one certificate carrying both parts. When he files, the INR 18,600.00 already deposited is set against his final tax, and only the difference is payable or refundable.
Common mistakes
- Typing Part A in a spreadsheet at the office. Part A is generated from the quarterly statements already filed, and a version that disagrees with those statements is useless to the employee.
- Refusing a certificate to somebody who resigned in September. The employer that deducted the tax issues it for the period it employed the person, whatever month they left in.
- Handing an employee below the taxable limit a certificate showing zero tax. Where no tax was deducted there is nothing to certify, so give a salary certificate on letterhead if they need proof of income.
How VTClock handles it
VTClock generates no Form 16 and issues no tax certificate. It produces monthly salary slips from the attendance record, which your accountant reads when preparing the certificate.
Frequently asked questions
Someone left me in November and joined another firm. Who issues their certificate?
Both employers issue one, each covering the months it actually paid the person and deducted tax. The employee ends up holding two certificates for that year and uses both when filing, because their total income for the year is the sum of the two. Issue yours for April to November on the normal timetable, and do not wait for the other employer to move first.
Can an employee file a return if I never gave them the certificate?
Yes. The tax credit shows in the department's own record against the employee's PAN once the quarterly statement has been filed, and a return can be prepared from that plus their salary slips. The certificate makes it far easier, since Part B carries the exemption and deduction working. An employer who deducted tax and does not issue the certificate is in default, so the practical answer is to issue it.
Is a monthly salary slip the same thing as a Form 16?
No. A salary slip covers one month and shows what was earned and deducted in that month. The certificate covers the whole financial year, consolidates the salary, and reports the tax that reached the government against the employee's PAN. Banks and the tax department treat them differently: the slip proves current income, and the certificate proves the year's income and the tax paid on it.
An employee lost their copy from two years ago. Can I reissue it?
Yes, and it is a routine request. Part A is pulled again from the tax department's system for that year, and Part B is reprinted from the salary working your accountant holds. This is one reason to keep payroll records for each closed year in an orderly place instead of throwing them out after filing. Keep the attendance behind those months too, since it is what the salary figures rest on.
Related terms
- TDS on salaryTDS on salary is income tax that an employer deducts from an employee's monthly pay and deposits with the government on that employee's behalf, under the Income Tax Act, 1961.
- Salary slipA salary slip is the statement an employer gives an employee for one wage period, setting out what was earned, what was deducted and what was paid.
- Gross salaryGross salary is the total of everything an employee earns for a month before a single deduction is taken off: the fixed structure of basic pay and allowances, plus whatever was...
- Net salaryNet salary is what is left of a month's earnings after every deduction the employer is required or authorised to make has come off.
- CTCCTC, short for cost to company, is the total annual amount an employer expects to spend on one employee.
- Full and final settlementA full and final settlement is the closing payment made when an employee leaves, covering everything still owed in both directions.
Modules that touch this
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