Other BriefingsForm 130 Due by June 15: Employer Obligations for TDS Certificate Issuance in India
Under the Income-tax Act, 2025, the Tax Deducted at Source (TDS) certificate framework has been revised. The new tax law replaces the previously used Form 16 and Form 16A under the Income-tax Act, 1961, with Form 130 and Form 131, respectively. Employers and deductors have largely transitioned to the new forms and must continue to meet key compliance obligations relating to TDS reporting, reconciliation, and certificate issuance.
The statutory deadline for issuing Form 130 is due by June 15, 2026. Entities should review their payroll and tax compliance processes, verify the accuracy of TDS returns, and reconcile tax deductions. It must be ensured they can generate and distribute certificates within the prescribed timelines.
CLICK HERE: Income Tax June 2026 Compliance Calendar: ITR Guide for Employers
Form 130: New salary TDS certificate from TY 2026-27
Form 130 replaces the previously applicable Form 16 and serves as the annual TDS certificate for salary income under the Income-tax Act, 2025. Employers that deduct tax from salary under Section 392 must issue Form 130. Specified banks must also issue the form when they deduct tax from pension income or eligible interest income of specified senior citizens.
Like the earlier Form 16 (under the Income-tax Act, 1961), Form 130 certifies that the deductor has deducted and deposited tax with the government. In addition, it provides a comprehensive summary of income paid during the tax year, tax deductions, exemptions claimed, tax liability, and taxes paid. Taxpayers can use this information to reconcile their tax position while preparing their income tax returns.
An overview of Form 130 introduced under new tax laws
Form 130 consists of three components—Part A, Part B, and Part C.
- Part A captures the identification details of both the deductor and the deductee, including the employer or specified bank and the employee, pensioner, or specified senior citizen.
- Part B summarizes the income paid or credited during the year, the amount subjected to TDS, and the tax deposited with the government.
- Part C provides detailed tax computations through two annexures.
- Annexure I applies to salaried employees and presents a detailed tax computation. This includes gross salary, exemptions, deductions, taxable income, tax liability, reliefs, TDS and TCS credits, and the net tax payable or refundable.
- Annexure II applies to specified senior citizens and sets out details relating to eligible interest income and the corresponding tax deductions made by specified banks.
Before generating Form 130, employers should reconcile salary records, exemption declarations, deductions, and year-end tax computations. This could ensure the accuracy of the information reported in the certificate.
ALSO READ: Rethinking Payroll Under India’s Income Tax Rules 2026: Employer Accountability in Salary & TDS
Form 131: Non-salary TDS certificate
Form 131 replaces the erstwhile Form 16A prescribed under the Income-tax Act, 1961, and serves as the prescribed TDS certificate for non-salary payments under Section 395(4)(a) of the Income-tax Act, 2025.
The certificate applies to a broad range of payments subject to TDS. This includes professional and consultancy fees, contract payments, rent, commission, brokerage, interest income, and other specified payments. Similar to Form 16A under the previous regime, Form 131 certifies that tax has been deducted and deposited with the government and enables recipients to claim the corresponding TDS credit in their income tax returns.
Timely TDS return filing
Employers and other deductors should treat TDS certificate issuance as an integral part of the broader TDS compliance cycle rather than a standalone obligation. They must first file the applicable quarterly TDS statements and ensure that the tax authorities successfully process those returns before generating and issuing Forms 130 and 131.
For salary-related deductions, employers generate Form 130 using the information they report in Form 138. Likewise, deductors can generate Form 131 for non-salary payments only after they file the relevant quarterly TDS statements, including Forms 140 or 144, and complete the prescribed processing requirements.
As the Form 130 issuance deadline approaches, organizations should review and ensure that their quarterly returns accurately capture all payments made and taxes deposited during the relevant tax year. Companies that file inaccurate or delayed TDS returns risk losing the ability to generate certificates through TRACES. This may hinder compliance with statutory issuance deadlines and affect accurate tax reporting.
Managing corrections, reconciliation and reissuance of TDS certificates
Since information reported in TDS returns directly populates Forms 130 and 131, businesses should perform comprehensive reconciliations before issuing these certificates. Organizations should review employee salary records, exemption declarations, deduction claims, vendor payment data, PAN information, challan details, and tax deposit records to identify and resolve discrepancies in advance.
If deductors identify inaccuracies after issuing a certificate, they cannot manually amend Form 130 or Form 131. Instead, they must file a revised TDS statement, ensure processing of the corrected return, and then download and issue a revised certificate through TRACES.
A proactive review process helps businesses reduce compliance risks, minimize the need for reissuance, and ensure timely and accurate tax reporting.
Frequently asked questions (FAQs)
1. Who is responsible for issuing Form 130 and Form 131?
Employers that deduct tax from salary income under Section 392 of the Income-tax Act, 2025, must issue Form 130 to employees. Specified banks must also issue Form 130 in respect of pension income and eligible interest income of specified senior citizens where tax has been deducted at source. Form 131 must be issued by any deductor that deducts tax on non-salary payments, including companies, limited liability partnerships (LLPs), partnership firms, proprietorship concerns subject to TDS provisions, government entities, and other persons covered under the Act.
2. How do Forms 130 and 131 differ from Forms 16 and 16A?
Form 130 serves as the prescribed TDS certificate for salary income, while Form 131 applies to non-salary payments subject to TDS. Although the form numbers and statutory references have changed under the Income-tax Act, 2025, the underlying compliance framework remains substantially unchanged. Both forms continue to certify the deduction and deposit of tax at source and enable taxpayers to claim corresponding TDS credits.
3. What are the due dates for issuing Form 130 and Form 131?
For Tax Year 2025-26 (April 1, 2025, to March 31, 2026), employers and specified banks must issue Form 130 on or before June 15, 2026.
For Tax Year 2026-27 (April 1, 2026, to March 31, 2027), employers and specified banks must issue Form 130 on or before June 15, 2027.
Form 131 must be issued within the prescribed timelines applicable to the relevant quarter following the filing and processing of the corresponding TDS statements.
4. Are there circumstances in which Form 130 is not required to be issued?
The obligation to issue Form 130 arises only where an employer or specified bank has deducted and deposited tax at source on the relevant income. Where no tax has been deducted during the tax year, the requirement to issue Form 130 generally does not arise. Employers may nevertheless provide salary statements or other payroll records for administrative and record-keeping purposes.
5. Can employers issue Form 130 or Form 131 without filing TDS returns?
No. Employers and other deductors must first file the applicable quarterly TDS statements and ensure that the returns have been processed before generating TDS certificates through TRACES. Since Forms 130 and 131 are generated from information reported in TDS returns, delays or inaccuracies in return filing may affect the timely issuance of certificates.
Stay compliant with India’s advance tax filing requirements for TY 2026-27
With Form 130 and the first advance tax installment due on June 15, 2026, businesses and investors should review tax estimates, payment schedules, TDS/TCS adjustments, and compliance systems. Dezan Shira & Associates assists companies with advance tax computation, challan filing, tax forecasting, and ongoing compliance support across India.
Connect with our India tax advisory team → India@dezshira.com
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