How to Read Your Form 16 — Part A vs Part B Explained Simply (FY 2025-26)

Every June, millions of salaried professionals across India receive a PDF in their inbox from their HR department titled "Form 16".

For most, the reaction is the same: they open it, stare at the confusing numbers and legal jargon, get overwhelmed, and forward it straight to a CA (or blindly upload it to a tax portal).

But here is the truth—Form 16 is not a complex legal puzzle. It is simply a receipt. Understanding how to read it is the first step to taking control of your personal finances and ensuring you get your maximum legal tax refund.

Furthermore, with the massive overhaul of the Income Tax Act for FY 2025-26, your Form 16 looks different this year. Old section numbers have changed, and the New Tax Regime is now the default.

At VJR Advisory Group, we believe taxes shouldn't be a mystery. Here is your ultimate, jargon-free guide to reading your Form 16, understanding the difference between Part A and Part B, and spotting the hidden errors that could trigger a tax notice.

1. What Exactly is Form 16? 📄

In the simplest terms, Form 16 is a "Tax Deducted at Source (TDS) Certificate."

When you earn a salary, your employer doesn't give you the full amount. They are legally required to calculate your estimated annual tax, deduct a portion of it every month (TDS), and deposit it with the government on your behalf.

Form 16 is your employer's official proof to you that says: "Here is exactly how much we paid you this year, and here is exactly how much tax we deposited with the government in your name."

💡 Pro tip — The ₹3 Lakh Exemption Rule If your total annual income is below the basic exemption limit (₹3 Lakhs under the New Regime), your employer is not legally required to deduct any TDS. Therefore, they are not obligated to issue you a Form 16. However, you should still ask for a salary statement to file a "Nil" ITR!

2. Form 16: Part A (The Government’s Receipt) 🏛️

Form 16 is split into two distinct parts. Let's start with Part A.

Think of Part A as the official receipt directly from the Income Tax Department. Your employer cannot just type this up on a Word document; they must securely generate and download Part A from the government’s TRACES portal.

What to check in Part A:

Your PAN Details: This is the most critical check. If your PAN is wrong here, the tax deducted will go to someone else's account!
Employer Details: Their Name, PAN, and TAN (Tax Deduction Account Number).
Summary of Tax Deducted: This is a quarter-by-quarter breakdown of exactly how much tax was deducted from your salary and deposited into the government's bank account.
Challan Details: These are the specific receipt numbers proving the money actually reached the government.

🚨 Critical rule — The 26AS Match The total tax deposited shown in Part A of your Form 16 MUST perfectly match the TDS reflected in your online Form 26AS (your tax passbook on the IT portal). If your Form 16 says ₹50,000 was deducted, but Form 26AS only shows ₹40,000, your employer has made a filing error. You must ask HR to fix this immediately before you file your ITR!

3. Form 16: Part B (The Salary Breakup) 📊

If Part A is the receipt, Part B is the calculation sheet.

Part B is an annexure prepared directly by your employer’s payroll software. It shows the detailed math of how they arrived at the final tax figure.

What to check in Part B:

Gross Salary Breakdown: Your basic pay, HRA, special allowances, bonuses, and perquisites.
Exempt Allowances: If you submitted rent receipts to HR in January, your approved HRA exemption will show up here.
Standard Deduction: For FY 2025-26, this should clearly show a flat deduction of ₹75,000 (under the New Regime) or ₹50,000 (under the Old Regime).
Chapter VI-A Deductions (Old Regime Only): If you opted for the Old Regime, this is where you will see the investments you declared to HR, such as your Section 80C (EPF, LIC, PPF) and Section 80D (Health Insurance) deductions.
Net Taxable Income: The final figure on which your tax was actually calculated.

⚠️ The FY 2025-26 Update: Watch for Regime Errors!

From FY 2025-26, the New Tax Regime is the default. If you did not explicitly email your HR back in April to opt for the Old Regime, they calculated your Part B using the New Regime (meaning zero deductions for 80C or HRA).

Make sure Part B reflects the tax regime you actually want to use! If your employer used the New Regime, but you want to file using the Old Regime (to claim a home loan, for example), you can still switch regimes while filing your ITR on the portal.

4. What is Form 16A and Form 16B? 🧩

You might hear your CA ask for "16A" and get confused. They are completely different forms:

Form 16: Only for Salary income (issued by your employer).
Form 16A: For Non-Salary income. If you earn heavy interest on fixed deposits, or if you are a freelancer earning professional fees, the bank or client will deduct 10% TDS and issue you a Form 16A every quarter.
Form 16B: For Property sales. If you sell a house worth more than ₹50 Lakhs, the buyer deducts 1% TDS and gives you Form 16B.

5. The Top 3 Mistakes DIY Filers Make with Form 16 ❌

Blindly Copy-Pasting: Do not just blindly copy the "Gross Salary" from Part B into your ITR. You must cross-check it with your Annual Information Statement (AIS). If you switched jobs, you need to combine the salary from both Form 16s!
Ignoring Other Income: Form 16 ONLY shows your salary. It does not include the interest you earned on your savings account or the mutual funds you sold. If you file your ITR using only Form 16, you will get a notice for hiding your other income.
Forgetting Unclaimed Deductions: Did you miss the January deadline to submit your LIC premium receipt to HR? Don't panic! It won't show in Part B, but you can still manually claim that deduction while filing your ITR on the portal to get a refund.

Don't Let Tax Jargon Cost You Your Refund!

Understanding Form 16 is empowering, but dealing with job changes, missed investment declarations, or mismatches between Part A and Form 26AS can quickly become a nightmare.

At VJR Advisory Group, our Chartered Accountants do more than just data entry. We meticulously reconcile your Form 16 against your AIS and 26AS, ensure the correct tax regime is applied, and hunt down every legal deduction you might have missed to maximize your tax refund.

Stop stressing over your salary documents. Chat with our Tax Experts on WhatsApp or Book your ITR Filing Service today for a flawless, notice-free filing!