Table of Contents
- Introduction
- What Is Form 16?
- Why Has Form 16 Been Updated for FY 2024–25?
- Summary of Key Changes in Form 16
- Updated Structure: Part A vs Part B
- What Employees Must Double-Check Before Filing ITR
- Matching Form 16 with AIS and Form 26AS
- Common Mistakes and Misreporting Issues
- Sample Illustration of the New Format
- FAQs
- Conclusion
1. Introduction
With the introduction of revised tax slabs and additional deductions in Budget 2025, the Central Board of Direct Taxes (CBDT) has notified a new Form 16 format applicable from FY 2024–25 (AY 2025–26). This new format aims to bring better alignment with pre-filled ITR forms, Annual Information Statement (AIS), and taxpayer transparency.
Whether you’re an employee or a tax consultant assisting clients, it’s important to understand what’s changed and what you need to double-check before filing your ITR.
2. What Is Form 16?
Form 16 is a certificate issued by an employer to a salaried employee, providing a detailed breakup of:
- Salary paid during the financial year
- TDS (Tax Deducted at Source) deducted and deposited
- Deductions claimed under Chapter VI-A (like 80C, 80D, 80CCD, etc.)
- Income tax liability under old/new regime
It acts as the primary proof of TDS and is used for filing the Income Tax Return (ITR-1 or ITR-2).
3. Why Has Form 16 Been Updated for FY 2024–25?
The Budget 2025 made several important structural changes to personal taxation:
- New tax slabs under the proposed Income-tax Bill, 2025
- Increase in the standard deduction from ₹50,000 to ₹75,000
- Section 80CCD(1B) clarified for dependents (e.g., Vatsalya NPS)
- Optionality in regime selection made part of employer declaration
- Alignment of salary components with revised Schedule S of ITR
These updates required restructuring of Form 16 to ensure full traceability, minimize mismatches, and allow automated pre-filling in ITR forms.
4. Summary of Key Changes in Form 16
| Area | Old Format | New Format (FY 2024–25) |
|---|---|---|
| Standard Deduction | ₹50,000 | ₹75,000 (auto-populated) |
| Regime Declaration | Mentioned separately | Part of salary summary |
| 80CCD(1B) | Often clubbed with 80C | Reported independently |
| NPS (Vatsalya) | Not specifically shown | Shown as “Dependent Contribution” |
| Leave Encashment | Shown in remarks | Now under exempt allowances |
| Pre-filled Match Tags | Not present | New column for “Matches AIS/ITR Pre-fill” |
5. Updated Structure: Part A vs Part B
Part A (TDS Summary)
- Employer PAN & TAN
- Employee PAN, Aadhaar (if available)
- Period of employment
- Quarterly breakup of salary paid and TDS deducted
- Date of TDS deposit and challan number
No structural changes here, but formatting has been made machine-readable.
Part B (Detailed Salary and Tax Computation)
Here’s what’s newly added or revised:
- Breakup of Gross Salary (Basic, HRA, Special Pay, etc.)
- Exempt Allowances (e.g., HRA, LTA, education allowance)
- Standard Deduction: ₹75,000
- Deductions under Chapter VI-A:
- 80C
- 80D
- 80CCD(1), 80CCD(1B) (now separately shown)
- 80E, 80TTA, 80G (with receipt number if claimed)
- NPS Contribution for Dependent – new subhead under 80CCD
- Tax Regime Opted: Clearly shown with tick box
- Tax Payable/Refundable based on total income and TDS
6. What Employees Must Double-Check Before Filing ITR
Before filing your income tax return, here are the most important items to review in Form 16:
A. Regime Declaration
- Confirm whether you’re under the new or old regime
- The tax liability will differ drastically depending on this
B. Standard Deduction
- Ensure ₹75,000 is mentioned and not the older ₹50,000 figure
C. 80CCD(1B) Deductions
- This is often missed or clubbed under 80C
- If you’ve contributed ₹50,000 to NPS (yourself or dependent), ensure it’s listed separately
D. Exemptions and Allowances
- HRA, LTA, and other exemptions should match your salary structure
- If not listed, you may lose out on legitimate deductions
E. Total Income Computation
- Your net taxable income must match the income in AIS/Form 26AS
7. Matching Form 16 with AIS and Form 26AS
With AIS (Annual Information Statement) becoming the backbone of return pre-filling, here’s what to verify:
| Source | Match With | Action if Mismatch |
|---|---|---|
| Form 16 TDS | Form 26AS | Raise grievance if missing |
| Salary | AIS income row | Review bonus/taxable perks |
| Deductions | ITR pre-fill | Edit if not auto-filled |
| Regime | ITR summary | Switch manually if incorrect |
8. Common Mistakes and Misreporting Issues
- Mismatch in PAN: TDS won’t reflect in 26AS/AIS
- Wrong regime declaration: Could lead to underpayment or refund delays
- Double claim of deductions: Claiming same 80C items in spouse’s name
- Perquisite values not included: Clubbing value of company car, rent-free accommodation, etc.
- Missing 80CCD(1B) or NPS entries: Leading to ₹15,000+ in extra tax liability
9. Sample Illustration of the New Format (Simplified)
Gross Salary: ₹14,00,000
Standard Deduction: ₹75,000
HRA Exemption: ₹1,80,000
Net Taxable Salary: ₹11,45,000
Deductions:
- 80C (LIC + PPF): ₹1,50,000
- 80CCD(1B) (NPS): ₹50,000
Net Taxable Income: ₹9,45,000
Tax Payable (New Regime): ₹33,800
TDS Deducted: ₹34,000
Refund Due: ₹200
10. FAQs
Q1. Is the updated Form 16 format mandatory from FY 2024–25?
Yes. All employers must issue Form 16 in the revised format for the financial year ending March 31, 2025.
Q2. Can I switch regimes after Form 16 has been issued?
Yes, while filing the return, you can still switch to another regime if eligible.
Q3. What if my employer didn’t show 80CCD(1B) separately?
You can still claim it while filing your ITR, but ensure you retain proof (NPS transaction, UTR, etc.)
Q4. Does Form 16 include stock options or bonuses?
Yes, all components of your salary, including ESOPs and performance bonuses, should be listed.
11. Conclusion
With the revised Form 16 for FY 2024–25, the Income Tax Department is ensuring greater traceability, fewer mismatches, and enhanced pre-fill accuracy. However, the burden still lies with the taxpayer to verify, match, and file correctly.
Before you upload your ITR, take 15 minutes to review Form 16 in detail. A single oversight — such as a missed 80CCD deduction or incorrect regime flag — could cost you thousands in tax or delay your refund.
Keep your Form 16, AIS, Form 26AS, and investment proofs side-by-side, and you’ll sail through the ITR season smoothly.
Stox N Tax 
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