Form 16 & Form 16A Due June 15, 2026: Employer Obligations for TDS Certificate Issuance in India

Employers and deductors across India must prepare for the June 15 deadline for issuing Form 16 and Form 16A for FY 2025-26, two critical TDS certificates that enable taxpayers to claim tax credits and complete their income tax filings accurately.

Tax Deducted at Source (TDS) certificates play a critical role in India’s tax compliance framework. It allows taxpayers to verify taxes deducted on their behalf, claim TDS credits while filing income tax returns, and reconcile their overall tax liability. Employers and deductors that fail to issue TDS certificates within the prescribed timelines may face penalties and create compliance challenges for taxpayers.

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Although the newly enacted Income-tax Act, 2025, introduces a new TDS certificate framework, businesses must continue to issue Form 16 and Form 16A for FY 2025-26. New tax Forms 130 and 131 will apply only to income earned and tax deducted under the Income-tax Act, 2025, beginning with Tax Year (TY) 2026-27.

Salary TDS certificate due by June 15, 2026

Form 16 serves as the annual TDS certificate that employers issue to employees when they deduct tax from salary income during the financial year. The certificate confirms that the employer has deducted tax from salary payments and deposited the tax with the government.

Employees use Form 16 to reconcile salary income, verify TDS credits, and prepare their income tax returns.

Form 16 consists of two parts:

1. Part A contains details of the employer and employee, including Permanent Account Number (PAN), Tax Deduction Account Number (TAN), and a summary of tax deducted and deposited with the government.
2. Part B contains the detailed salary and tax computation, including gross salary, exemptions, deductions, taxable income, tax liability, and taxes deducted during the year.

Form 16A– TDS certificate for non-salary payments

This form applies to payments other than salary where the payer has deducted tax at the source. Common examples include professional fees, consultancy fees, contract payments, rent, commission, brokerage, and interest payments.

Unlike Form 16, which is issued annually, Form 16A is issued quarterly after the filing and processing of the corresponding TDS return.

For payments made during the January-March 2026 quarter, deductors must issue Form 16A by June 15, 2026.

The certificate provides details of the payment made, tax deducted, challan information, and TDS deposited with the government.

Also read: Income Tax June 2026 Compliance: Form 16 Issuance, TDS Deadlines in India

Why timely issuance matters

Employers and deductors should treat TDS certificate issuance as an integral part of the broader TDS compliance cycle rather than as a standalone obligation.

Before generating Form 16 or Form 16A, deductors must:

1. File the applicable TDS returns within the prescribed timelines
2. Ensure successful processing of those returns by the tax authorities
3. Reconcile employee and vendor records
4. Verify PAN, challan, and TDS data
5. Confirm that taxes deducted match taxes deposited with the government

Errors or delays in TDS return filing may prevent deductors from generating certificates through TRACES and may affect compliance with statutory deadlines.

Managing corrections and reconciliation

Since information reported in TDS returns directly populates Form 16 and Form 16A, organizations should conduct detailed reconciliations before issuing certificates.

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Businesses should review:

1. Salary records and payroll data
2. Exemption declarations and deduction claims
3. Vendor payment information
4. PAN details
5. TDS challans
6. Tax deposit records

If a deductor identifies an error after issuing a certificate, the correction process generally requires filing a revised TDS return and generating a revised certificate through TRACES.

A proactive review process can significantly reduce compliance risks and minimize the need for certificate reissuance.

Preparing for the transition to Forms 130 and 131

Although Form 16 and Form 16A remain applicable for FY 2025-26, businesses should also prepare for the new TDS certificate framework introduced under the Income-tax Act, 2025.

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Under the new law:

• Form 130 will replace Form 16 for salary income
• Form 131 will replace Form 16A for non-salary payments

These forms will apply to tax deductions governed by the Income-tax Act, 2025, beginning with TY 2026-27.

Form 130 will continue to serve as the primary salary TDS certificate and will contain information relating to income, tax deductions, exemptions, deductions claimed, tax liability, and taxes paid. Similarly, Form 131 will serve as the prescribed TDS certificate for non-salary payments.

Source: FAQs on Interplay and Transition, Income Tax Department

Frequently Asked Questions (FAQs)

1. Can an employer issue Form 16 if no tax was deducted from an employee’s salary?

Generally, no. Employers issue Form 16 only when they deduct and deposit tax at source from salary income. If an employee’s salary does not attract TDS, the employer is not legally required to issue Form 16, although many organizations provide salary statements or payroll summaries for record-keeping purposes.

2. Does an employer need an employee’s PAN to issue Form 16?

Yes. PAN is a critical component of TDS reporting and Form 16 generation. Employers should ensure that employee PAN details are correctly recorded and validated to avoid reporting mismatches and difficulties in claiming TDS credit.

3. Can an employee claim TDS credit if the employer fails to issue Form 16?

The absence of Form 16 does not automatically deprive an employee of TDS credit if the employer has correctly deducted, deposited, and reported the tax in the TDS return. However, the absence of Form 16 may make it more difficult for employees to reconcile income and tax credits while filing their returns.

4. What happens if an employer deducts TDS but does not deposit it with the government?

Failure to deposit TDS can expose the employer to interest liabilities, penalties, and other enforcement actions under the Income-tax Act. Employees may also face difficulties in obtaining proper credit for the taxes deducted from their salary.

5. What penalty may apply if an employer delays the issuance of Form 16 or a deductor delays the issuance of Form 16A?

For any income earned in FY 2025-26, the Income-tax Act, 1961, continues to govern the issuance of Form 16 and Form 16A. Under Section 272A(2)(g), tax authorities may levy a penalty of INR 500 per day of default for failure to issue TDS certificates within the prescribed time, subject to applicable statutory provisions.

6. Can businesses issue digitally signed TDS certificates?

Yes. Employers may issue Form 16 electronically, provided they comply with the applicable requirements relating to digital signatures and document authentication.

7. How long should employers retain Form 16 and related TDS records?

Employers should retain payroll records, TDS returns, challans, employee declarations, and supporting documentation for a reasonable period to support tax audits, assessments, inquiries, and future reconciliations.

8. Do foreign companies with employees in India need to issue Form 16?

Yes. If a foreign company deducts tax from salary paid to employees in India and complies with Indian TDS obligations, it must issue Form 16 in the same manner as any other employer subject to Indian tax laws.

9. Does the transition to the Income-tax Act, 2025, affect Form 16 obligations for FY 2025-26?

No. Employers must continue to comply with Form 16 and Form 16A requirements for FY 2025-26. The transition to Forms 130 and 131 will apply to tax deductions governed by the Income-tax Act, 2025, beginning with TY 2026-27.

10. Which businesses should pay particular attention to the June 15, 2026 deadline?

The deadline is relevant for all employers that deducted tax from employee salaries during FY 2025-26, as well as companies, LLPs, partnerships, proprietorships, financial institutions, and other deductors that must issue Form 16A for non-salary payments subject to TDS.

This streamlined FAQ avoids repeating the substantive content already covered in the article while addressing practical compliance issues and common employer concerns.

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