Form 16 Generator

Compute Form 16 Part B line by line — from gross salary through exemptions, deductions, and tax computation to the final TDS figure — in the exact format required for 24Q Annexure II. Supports both old and new tax regimes, FY 2025-26 (Form 16) and Tax Year 2026-27 (Form 130), and produces the complete computation sheet you need for quarterly TDS filing and employee tax certificates. Free, private, nothing to sign up for.

From Tax Year 2026-27 (salary from 1 April 2026), Form 16 is replaced by Form 130 under Section 395(4)(b) of the Income Tax Act, 2025, read with Rule 215(1) of the Income Tax Rules, 2026. This tool generates the Part B computation in either format — select the year, and the form number, section references, and deduction chapter labels update automatically.

What Is Form 16 Part B?

Form 16 is the annual TDS certificate issued by an employer to a salaried employee certifying the salary paid and tax deducted during the financial year. It has two parts.

Part A is generated from the TRACES portal. It contains the employer’s TAN, the employee’s PAN, quarterly TDS deposit details with challan numbers and BSR codes, and a unique certificate number. The employer downloads this from TRACES — it is not manually prepared.

Part B is prepared by the employer using payroll data. It is the detailed salary-and-tax computation — the actual arithmetic that determines how much TDS was deducted. It shows the complete journey from gross salary to net tax payable: every salary component, every exemption, every deduction, the applicable slab rates, rebate, surcharge, cess, and the final tax figure.

Part B is also the exact content of Annexure II in the quarterly TDS return Form 24Q (Q4). When you file the Q4 return, you enter each employee’s Part B computation into Annexure II. TRACES then uses this data to generate the Part B that the employee downloads as part of their Form 16. The two are the same document.

This tool computes Part B. You enter the salary components and investment declarations. It produces the line-by-line computation in the official format — ready for Annexure II filing and for issuing to the employee.

Form 16 Is Now Form 130 – The Renumbering

The Income Tax Act, 2025 replaced the Income Tax Act, 1961 effective from 1 April 2026. In this transition, all prescribed forms have been renumbered.

Old vs New Legal References

TDS Certificate: Form 16 → Form 130.
Governing Section: Section 203 (IT Act, 1961) → Section 395(4)(b) (IT Act, 2025).
Salary TDS Section: Section 192 → Section 392.
Governing Rule: Rule 31 (IT Rules, 1962) → Rule 215(1) (IT Rules, 2026).
Quarterly Return: Form 24Q → Form 138.
Period Terminology: Financial Year / Assessment Year → Tax Year.

Which Form Applies When

For FY 2025-26 (AY 2026-27): Employer issues Form 16 by 15 June 2026. Employee uses it to file ITR by 31 July 2026. Old section numbers (192, 10(13A), Chapter VI-A, etc.).
For Tax Year 2026-27 (AY 2027-28): Employer issues Form 130 by 15 June 2027. Employee uses it to file ITR by 31 July 2027. New section numbers (392, corresponding new exemption sections, Chapter VIII-A/VIII-B, etc.).

Through 2026, both forms coexist — Form 16 covers FY 2025-26, Form 130 takes over from Tax Year 2026-27. Our tool handles both. Select the year and the labels switch automatically.

How the Form 16 Part B Computation Tool Works

Step 1 – Enter Employee Details

Input the employee’s name, PAN, the employer’s name and TAN, the assessment year or tax year, and the tax regime chosen by the employee (old or new). The regime selection controls which deductions and exemptions are available in subsequent steps.

Step 2 – Enter Salary Components

Enter the annual figures for each salary component: basic salary, HRA received, special allowance, conveyance allowance, leave encashment, leave travel allowance received, other allowances, perquisites (value of benefits under Section 17(2)), and profits in lieu of salary (Section 17(3)).

The tool computes gross salary from Section 17(1), Section 17(2), and Section 17(3) — matching the official Part B format exactly. If you need to compute the CTC-to-salary breakup first, use our salary calculator.

Step 3 – Enter Exemptions Under Section 10

This step appears only under the old tax regime (most Section 10 exemptions are unavailable under the new regime).

HRA exemption under Section 10(13A): Enter the actual HRA received, rent paid, basic salary plus DA, and city category (metro or non-metro). The tool computes the exempt amount as the minimum of three: actual HRA received, 50% or 40% of basic plus DA, and rent paid minus 10% of basic plus DA. Compute this separately with our HRA calculator.

LTA exemption under Section 10(5): Enter the amount claimed within the eligible limit.

Standard deduction: Rs 50,000 under the old regime, Rs 75,000 under the new regime (from FY 2024-25 onwards). This applies under both regimes and is automatically included.

Other Section 10 exemptions as applicable: children’s education allowance, hostel allowance, transport allowance for persons with disability, etc.

The tool computes “Income chargeable under the head Salaries” (Line 5 of Part B) by subtracting the total exemptions from gross salary.

Step 4 – Enter Income from Other Sources (If Declared to Employer)

If the employee has reported other income to the employer (income from house property — specifically loss from self-occupied property for home loan interest deduction, or other income for TDS adjustment), enter it here. This feeds into the gross total income computation.

Step 5 – Enter Deductions Under Chapter VI-A

This step appears only under the old tax regime (Chapter VI-A deductions are largely unavailable under the new regime, except Section 80CCD(2) for employer NPS). For the new regime, only the employer NPS contribution under Section 80CCD(2) and the standard deduction are available.

The tool lists every applicable deduction head with its limit:

Section 80C (limit Rs 1,50,000): EPF, PPF, ELSS, LIC, NSC, tax-saving FD, SCSS, SSY, tuition fees, home loan principal, stamp duty.
Section 80CCC: Pension fund contributions (within the 80C aggregate).
Section 80CCD(1): Employee NPS contribution (within the 80C aggregate).
Section 80CCD(1B): Additional NPS — Rs 50,000 above the 80C limit.
Section 80CCD(2): Employer NPS contribution — separate limit, works in both regimes.
Section 80D: Health insurance premium — self, family, parents (up to Rs 25,000 or Rs 50,000 each).
Section 80DD: Maintenance of dependent with disability.
Section 80DDB: Medical treatment for specified diseases.
Section 80E: Education loan interest (no limit).
Section 80EEA: Interest on home loan for affordable housing.
Section 80G: Donations to approved charities.
Section 80GG: Rent paid (if HRA not received).
Section 80TTA: Savings account interest up to Rs 10,000.
Section 80TTB: Deposit interest up to Rs 1,00,000 (senior citizens).

For Tax Year 2026-27 (Form 130), the section numbers change to their Income Tax Act, 2025 equivalents: 80C→123, 80CCD(1B)→124(3), 80D→126, Chapter VI-A→Chapter VIII-A/VIII-B, etc. The tool auto-maps these when you select the year.

Plan your deductions with our tax saving planner — it shows remaining headroom in every section.

Step 6 – View the Complete Tax Computation

The tool computes and displays every line of the Part B computation in order:

Gross salary (Section 17(1) + 17(2) + 17(3)). Less: exemptions under Section 10. Income chargeable under head “Salaries.” Add: income from other sources (if any). Gross total income. Less: deductions under Chapter VI-A (aggregate of all applicable sections). Total taxable income. Tax at applicable slab rates (old or new regime). Less: rebate under Section 87A (up to Rs 12,500 old regime / up to Rs 25,000 new regime with marginal relief). Tax after rebate. Add: surcharge (if taxable income exceeds Rs 50 lakh). Add: Health and Education Cess at 4%. Total tax liability. Less: relief under Section 89(1) (if applicable for arrears). Net tax payable. Tax already deducted (TDS). Tax payable or refundable.

The Part B Computation – Line by Line

Here is the exact structure of Form 16 Part B (and Form 130 Part B), with what each line means.

Line 1 – Gross Salary

(a) Salary as per provisions contained in Section 17(1): This is the total salary — basic, DA, HRA, special allowance, bonus, commission, advance salary, leave encashment received during service, overtime, and any other amounts falling under Section 17(1). It does not include perquisites or profits in lieu of salary.

(b) Value of perquisites under Section 17(2): The taxable value of non-monetary benefits — company-provided accommodation, car for personal use, interest-free or concessional loans, specified employer contributions to funds beyond limits, and other perquisites valued as per Rule 3. This section maps to Section 17(1)(d) under the new IT Act 2025.

(c) Profits in lieu of salary under Section 17(3): Any compensation received in connection with termination or modification of employment terms — gratuity in excess of the exempt amount, commuted pension in excess of exempt amount, leave encashment on retirement in excess of the exempt amount (for non-government employees), and specified payments under Section 17(3). Maps to Section 17(1)(e) under the new Act.

(d) Total of (a), (b), and (c) = Gross Salary.

For a complete breakdown of salary components, read our guide on salary structure in India and its tax implications.

Line 2 – Less: Allowances to the Extent Exempt Under Section 10

Each exempt allowance is listed with its exempt amount. Under the old regime, this typically includes HRA exemption under Section 10(13A), LTA exemption under Section 10(5), and other specified exemptions. Under the new regime, most of these are zero.

Line 3 – Balance (Gross Salary Minus Exemptions)

Line 4 – Deductions Under Section 16

(a) Standard deduction under Section 16(ia): Rs 50,000 for the old regime, Rs 75,000 for the new regime (FY 2024-25 onwards).
(b) Entertainment allowance deduction under Section 16(ii): Only for government employees — lower of Rs 5,000, 20% of salary, or actual allowance.
(c) Professional tax under Section 16(iii): Actual professional tax paid during the year, as per the state schedule.

Compute state-wise professional tax with our professional tax calculator.

Line 5 – Income Chargeable Under the Head “Salaries”

This is the net salary income after exemptions and Section 16 deductions. This figure must tie to the salary income in AIS and in the “Income from Salary” section of the ITR. Cross-check this with our 26AS / AIS reconciliation tool before filing.

Lines 6-7 – Add: Other Income and Gross Total Income

Any income from house property (typically a negative figure for self-occupied property with home loan interest deduction) or other income reported to the employer is added here. The result is Gross Total Income.

Lines 8-11 – Deductions Under Chapter VI-A

Each deduction section is listed with the claimed and allowable amount (the lower of the amount claimed and the section limit). The total deductions are subtracted from gross total income to arrive at total taxable income.

Lines 12-18 – Tax Computation

Tax on total income is computed at the applicable slab rates for the chosen regime. Rebate under Section 87A (Section 202 under the new Act) is applied if eligible. Surcharge is added if total income exceeds Rs 50 lakh. Health and Education Cess at 4% is added. Relief under Section 89(1) (Section 157 under the new Act) is subtracted if salary arrears were received. The final figure is the net tax payable — this is the total TDS the employer should have deducted during the year. If arrears were received, use our Form 10E calculator to compute the Section 89(1) relief.

Tax Slabs Used in the Computation – FY 2025-26 and Tax Year 2026-27

New Tax Regime (Default)

Up to Rs 4,00,000: Nil.
Rs 4,00,001 to Rs 8,00,000: 5%.
Rs 8,00,001 to Rs 12,00,000: 10%.
Rs 12,00,001 to Rs 16,00,000: 15%.
Rs 16,00,001 to Rs 20,00,000: 20%.
Rs 20,00,001 to Rs 24,00,000: 25%.
Above Rs 24,00,000: 30%.

Standard deduction: Rs 75,000. Rebate under Section 87A: full rebate on tax if total income does not exceed Rs 12,00,000 (with marginal relief up to Rs 12,75,000 effective). Surcharge capped at 25%. The new regime is the default — the employee must actively opt out to use the old regime.

Old Tax Regime

Up to Rs 2,50,000: Nil (Rs 3,00,000 for senior citizens, Rs 5,00,000 for super senior citizens).
Rs 2,50,001 to Rs 5,00,000: 5%.
Rs 5,00,001 to Rs 10,00,000: 20%.
Above Rs 10,00,000: 30%.

Standard deduction: Rs 50,000. Rebate under Section 87A: Rs 12,500 if total income does not exceed Rs 5,00,000. Full Chapter VI-A deductions and Section 10 exemptions available.

Estimate your TDS under either regime with our TDS calculator.

Who Needs This Tool

HR and Payroll Teams

Payroll departments compute Part B for every employee at the end of each financial year. This tool generates the computation in the exact Annexure II format — enter the salary data, get the Part B output, and feed it into your 24Q Q4 return (Form 138 Q4 from Tax Year 2026-27). It handles both regimes, validates against section limits, and produces a print-ready computation sheet for the employee’s records.

For companies running payroll at scale, our payroll management system automates the entire process from monthly salary processing through annual Form 16/130 generation.

Employees Verifying Their Form 16

If you have received your Form 16 and want to verify whether the tax computation is correct — whether the employer applied your deductions correctly, used the right slab rates, and computed the cess and rebate properly — enter your salary details and declarations into this tool and compare the output against your Form 16 Part B. Any difference indicates an error that needs correction before you file your ITR.

Chartered Accountants and Tax Practitioners

CAs preparing salary computations for clients can use this tool to generate the Part B computation quickly and verify the figures before filing. The output matches the 24Q Annexure II format, which simplifies both the TDS return filing and the Form 16 issuance process.

Small Business Owners Acting as Employers

If you employ salaried staff and deduct TDS under Section 192 (Section 392 from April 2026), you must issue Form 16 (Form 130) by 15 June every year. Failure to issue on time attracts a penalty of Rs 100 per day under Section 272A, up to the TDS amount. This tool helps you generate the Part B computation even without enterprise payroll software.

Common Errors in Form 16 Part B Computation

Error 1 – Wrong Regime Applied

The new regime is the default from FY 2023-24 onwards. If the employee filed Form 10-IE (or made an opt-out declaration) for the old regime but the employer computes under the new regime (or vice versa), the entire tax computation is wrong. The Part B must match the regime the employee has chosen for that year. Verify the employee’s regime choice before computing.

Error 2 – Missing Standard Deduction

The standard deduction (Rs 50,000 old / Rs 75,000 new) applies to all salaried employees in both regimes. Some manual computations miss this, resulting in higher taxable income and over-deduction of TDS. The tool applies it automatically.

Error 3 – 80C Limit Exceeded

The combined limit for Sections 80C, 80CCC, and 80CCD(1) is Rs 1,50,000. If the employee’s EPF contribution alone is Rs 1,44,000 (12% of basic at Rs 1,00,000 per month), only Rs 6,000 of headroom remains for PPF, ELSS, LIC, or other 80C investments. Including Rs 50,000 of additional investments would exceed the cap. The tool enforces the aggregate limit.

Error 4 – Claiming Old Regime Deductions Under New Regime

Under the new regime, the only deductions allowed are the standard deduction and employer NPS contribution under Section 80CCD(2). All other Chapter VI-A deductions (80C, 80D, 80CCD(1B), etc.) and Section 10 exemptions (HRA, LTA) are unavailable. The tool automatically disables these fields under the new regime to prevent this error.

Error 5 – Incorrect Section 87A Rebate Application

Under the new regime, the rebate applies when total income does not exceed Rs 12,00,000, with marginal relief extending effective tax-free income to Rs 12,75,000. Under the old regime, the rebate applies when total income does not exceed Rs 5,00,000. Applying the wrong rebate threshold under the wrong regime is a common computation error.

Error 6 – Omitting Cess

Health and Education Cess at 4% is computed on the total of income tax plus surcharge, after rebate. Omitting the cess from the computation understates the tax liability. The tool always includes it.

How Form 16 Part B Connects to Your ITR

The figures from Part B flow directly into specific sections of your ITR.

“Income chargeable under the head Salaries” (Part B Line 5) → maps to “Income from Salary” in ITR-1 Part B / ITR-2 Schedule S.
Chapter VI-A deductions (Part B Lines 8-11) → maps to the deductions schedule in ITR.
TDS figures from Part A → maps to the TDS schedule, cross-verified against Form 26AS (Form 168).
Total income and tax payable → should match the computation summary in ITR.

If any figure does not match, investigate before filing. Mismatches between Form 16 and the ITR create processing issues under Section 143(1) and can trigger demand notices for unmatched TDS credits. Reconcile using our 26AS / AIS reconciliation tool.

Key Deadlines

Employer files 24Q Q4 (with Annexure II): 31 May following the financial year end.
Employer issues Form 16 (Form 130) to employee: 15 June following the financial year end.
Penalty for late Form 16: Rs 100 per day per certificate under Section 272A (up to the TDS amount).
Employee files ITR using Form 16: 31 July for non-audit cases.

For Tax Year 2026-27: Employer files Form 138 Q4 by 31 May 2027. Employer issues Form 130 by 15 June 2027. Employee files ITR by 31 July 2027.

Other Free Payroll and Tax Tools from SalaryBox

Salary Calculator – Convert CTC to monthly in-hand salary.
TDS Calculator – Estimate monthly and annual TDS deductions.
Tax Saving Planner – Plan deductions with section-wise headroom view.
HRA Calculator – Compute HRA exemption for Section 10(13A).
PF Calculator – Calculate employee and employer PF contributions.
Professional Tax Calculator – State-wise professional tax.
Salary Slip Generator – Generate monthly pay slips.
Form 12BB Generator – Generate investment declaration for TDS.
26AS / AIS Reconciliation – Diagnose every mismatch before filing.
Gratuity Calculator – Estimate gratuity eligibility and amount.

Explore all tools on our free tools page.

Frequently Asked Questions (FAQ)

What is Form 16 Part B and how is it different from Part A?

Form 16 Part A is generated from TRACES and contains TDS deposit details — quarterly challan numbers, BSR codes, and the total TDS deposited with the government. Part B is prepared by the employer and contains the detailed salary-and-tax computation — gross salary, exemptions, deductions, slab-wise tax, rebate, surcharge, cess, and the final tax payable. Part A is a receipt; Part B is the computation.

Has Form 16 been replaced by Form 130?

Yes. From Tax Year 2026-27 (salary from 1 April 2026), Form 16 has been replaced by Form 130 under Section 395(4)(b) of the Income Tax Act, 2025, read with Rule 215(1) of the Income Tax Rules, 2026. The first Form 130 will be issued by 15 June 2027. For FY 2025-26 (AY 2026-27), employers continue to issue Form 16. Our tool generates the Part B computation in either format based on the year you select.

What is 24Q Annexure II and how does it relate to Form 16 Part B?

24Q is the quarterly TDS return filed by employers for salary TDS. Annexure II is filed with the Q4 return (covering January-March) and contains the full-year salary computation for each employee — the exact same data that appears in Form 16 Part B. TRACES generates Part B from Annexure II data. When you use our tool to compute Part B, the output is directly usable for filing Annexure II. From Tax Year 2026-27, 24Q becomes Form 138.

Which tax regime should I compute Part B under?

Compute under the regime the employee has chosen. The new regime is the default from FY 2023-24 onwards. If the employee has opted out (filed Form 10-IE or made an opt-out declaration) to use the old regime, compute under the old regime. The employee’s regime choice must be respected — the employer cannot choose for the employee. If the employee has not opted out, apply the new regime by default.

What deductions are available under the new tax regime?

Under the new regime, only the standard deduction (Rs 75,000 from FY 2024-25) and employer NPS contribution under Section 80CCD(2) are available. All other Chapter VI-A deductions (80C, 80D, 80CCD(1B), 80E, 80G, etc.) and Section 10 exemptions (HRA, LTA) are not available. The computation under the new regime is simpler but results in higher taxable income unless the lower slab rates compensate.

When must the employer issue Form 16?

By 15 June following the end of the financial year. For FY 2025-26, the deadline is 15 June 2026. For Tax Year 2026-27, Form 130 must be issued by 15 June 2027. Late issuance attracts a penalty of Rs 100 per day per certificate under Section 272A of the Income Tax Act, capped at the TDS amount.

How do I verify if my employer’s Form 16 Part B is correct?

Enter all your salary components and declared deductions into this tool and compare the output against your Form 16 Part B line by line. Check that the gross salary matches your salary slips, exemptions are correctly computed (especially HRA), deductions match your Form 12BB submissions, the correct slab rates are applied for your regime, and the rebate, surcharge, and cess are calculated correctly. Any difference indicates an error you should raise with your payroll team before filing your ITR.

What is the 50% wage rule and does it affect Form 16 Part B?

Under the new labour codes (in force from 21 November 2025), basic pay plus DA must constitute at least 50% of total remuneration. This affects the salary structure — and therefore the Form 16 Part B computation — because a higher basic means higher PF deductions, higher HRA (which is a percentage of basic), and a different balance of allowances. The Part B computation reflects whatever salary structure the employer has applied. The tool accepts any structure and computes accurately.

Can I use this tool for multiple employees?

Yes. Compute one employee at a time, download or print the Part B, and start the next. For bulk processing across hundreds of employees, our payroll system handles automated Form 16/130 generation for all employees simultaneously.

Is this tool free?

Yes. The SalaryBox Form 16 Part B Computation Tool is completely free with no registration, login, or payment required. All processing happens in your browser — salary data is never uploaded to any server. Use it for as many employees as needed.

Conclusion

Form 16 Part B is the heart of salary tax compliance — it is the computation that determines how much TDS was deducted from an employee’s salary and the basis on which the ITR is filed. Getting it wrong causes TDS mismatches, processing notices under Section 143(1), and demand notices that take months to resolve.

The SalaryBox Form 16 Part B Computation Tool generates the complete line-by-line computation in the exact 24Q Annexure II format — both old and new tax regimes, with every deduction limit enforced, and every line labelled to match the official form. It supports FY 2025-26 (Form 16) and Tax Year 2026-27 (Form 130), with section references that update automatically when you select the year.

Use it alongside our salary slip generator for monthly pay slips, our Form 12BB generator for investment declarations, and our 26AS / AIS reconciliation tool to verify everything ties together before filing.

Compute Form 16 Part B now — it is free, private, and matches the format your 24Q return expects.