What's Changed in Form 16 for ITR Filing 2025? All you need to Know

With the new ITR filing season for the Assessment Year 2025-26, salaried taxpayers need to be aware of all the major changes in Form 16 format. The CBDT has made changes to Form 16 to make income tax return filing ( ITR ) more transparent, convenient, and clear. Let's have the full rundown of what's new and why it matters.

WHAT IS FORM 16

Form 16 is a certificate issued annually by employers to their salaried employees, summarizing the salary paid and tax deducted at source (TDS) on that salary. It is a critical document for ITR filing, loan applications, and claiming tax refunds.

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What’s changed in TDS for 2025? - Click Here

KEY CHANGES IN THE FORM 16 FOR AY 2025-26

PART A - EMPLOYER AND EMPLOYEE DETAILS

The part A of the form 16 requires you to provide employer and employee details including the PAN, TAN, total tax deducted..etc. Part A serves as official proof that your employer has deducted TDS from your salary and deposited it with the Income Tax Department. You can use this section to cross-check the TDS figures with your salary slips and Form 26AS, ensuring there are no discrepancies before filing your ITR.

TDS Information:

• Quarterly summary of total salary payments for the relevant financial year
• Quarter-wise details of tax deducted and deposited with the government by the employer
• Challan Identification Number for each deposit, serving as proof that TDS has been paid to the government

What’s changed in TDS for 2025? - Click Here

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PART B - DETAILED SALARY BREAK DOWN

The Part B of the Form 16 required to provide the detailed salary breakdown. It provides a granular breakdown of salary components, exemptions, deductions, and taxable income. For FY 2024-25 (AY 2025-26), the updated format enhances clarity with recent tax reforms.

Gross Salary Breakdown

Under the Breakup of Gross Salary, Part B enumerates major constituents like basic salary, different allowances (like HRA, LTA, transport allowance), bonuses, and arrears paid for the year. It also comprises exemptions under Section 10 like HRA, LTA, and gratuity. Itfurther reveals taxable perquisites like rent-free accommodation or use of company car under Section 17(2).

What’s changed in TDS for 2025? - Click Here

Deductions Under Chapter VI-A

The form also details deductions under Chapter VI-A, which reduce the taxable income. These include:

• Section 80C: Contributions to EPF, PPF, life insurance premiums, and repayment of the principal on home loans.
• Section 80D: Premiums paid for health insurance.
• Section 80E: Interest payments on education loans.
• Section 80G: Donations to notified charitable institutions.
• Section 80TTA: Interest on savings accounts, up to ₹10,000.

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Tax Computation

The tax computation part captures the standard deduction of ₹50,000, then the net taxable income after considering all the exemptions and allowances that can be claimed. It also adds on relevant surcharge, health and education cess, and relief under Section 89 if any salary was taken in arrears or advance.

What’s changed in TDS for 2025? - Click Here

AY 2025-26 UPDATES

The 2025 version of Part B of Form 16 includes several noteworthy important. An important addition is the inclusion of contributions made to the Agniveer Corpus Fund, which are now reported under the newly introduced Section 80CCH, a tax-exempt category.

As part of an initiative to make it easier to interpret, salary components are now clearly classified as: exempt allowances such as House Rent Allowance (HRA) and taxable perquisites such as rent-free house are clearly indicated. Deductions under sections like 80C, 80D, 80E, and others are also listed out, providing more clarity for the employer and the employee.

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In addition, to facilitate sighting with Form 24Q, the new format includes Column 388A for enhanced reporting of TDS/TCS, further supporting consistency in reporting forms. Part B of the form 16 It is essential to ensure tax precision. Taxpayers must cross-check the entries with Form 26AS and pay slips to ensure no discrepancies.

What’s changed in TDS for 2025? - Click Here

A detailed tax computation section assists in identifying the excess TDS deductions, which can be refunded. Part B also acts as a proof of income document usually demanded at the time of taking loans, visas, or rental agreements.

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CHECKLIST BEFORE ITR FILING

Before filing your Income Tax Return (ITR), it is important to thoroughly review Part B of Form 16 and cross-verify its details for accuracy. Start by matching the figures with your monthly payslips, particularly focusing on gross salary components and claimed exemptions such as HRA or LTA.

Match Part B Details with Supporting Documents : It is important to cross-check the details stated in Part B of Form 16 with your monthly salary slips before submitting your Income Tax Return. Confirm that the gross salary, allowances like HRA and LTA, and exemptions are all accurately shown and in the same manner on both documents.

What’s changed in TDS for 2025? - Click Here

Also, ensure that all investment evidence such as contributions to Public Provident Fund (PPF), life insurance premia, and other deductions under Sections 80C, 80D, 80G, etc. are supported by valid receipts and are duly reflected in Form 16.

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Report Additional Income: Whereas Form 16 reflects salary income and associated tax deductions, it might not reflect income from other sources. Hence, one must manually add interest income from savings accounts, fixed deposits, or recurring deposits since these are not always shown in Form 16.

Also, if you have made capital gains by selling shares, mutual funds, or property during the financial year, you need to report the corresponding gains or losses in your income tax return. Other income like rental income, freelance income, or dividends received also need to be reported under the "Income from Other Sources" head, wherever applicable. Proper documentation of all sources of income guarantees complete conformity and prevents the risk of future audits or fines by the Income Tax Department.

Choose Your Tax Regime Wisely: If you opt for the new tax regime under Section 115BAC of the income tax act, it is important to express this option explicitly while submitting your Income Tax Return. The new regime has reduced tax rates but excludes several exemptions and deductions like those under Sections 80C, 80D, and HRA.

What’s changed in TDS for 2025? - Click Here

Because Part B of Form 16 may contain deductions under the existing regime, you will need to go through your eligibility and exclusions in each regime carefully before deciding. This allows you to make an informed decision, which maximizes tax savings and avoids mistakes at the time of return filing.

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Collect Part B from All Employers (If Job Switch Occurred): If you have switched jobs within the financial year, you should get Part B of Form 16 from all employers. You need to club salary and TDS information from all employers so that there is complete and accurate disclosure of your overall income. Not doing it might result in underreporting, triggering notices or scrutiny by the Income Tax Department.

Leverage the Updated Part B for Simpler Filing: The revised Part B of Form 16 for FY 2024–25 introduces increased transparency through clear enumeration of perquisites under Section 17(2), like rent-free accommodation and other non-monetary perquisites. The detailed reporting will enable employees to better comprehend their taxable elements.

What’s changed in TDS for 2025? - Click Here

Additionally, if you have contributed under Section 80CCH to the Agniveer Corpus Fund, make sure that these are correctly reported and substantiated in line with the current CBDT circulars since such contributions qualify for tax exemption under the new provisions.

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