Part A: TDS Deposited Details
Part A of Form 16 is generated directly from the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal by the employer. It is digitally signed and contains: the employer's name, address, and TAN; the employee's name, PAN, and designation; the assessment year; and a quarter-wise summary of TDS deducted and deposited. Each quarter shows the amount of TDS, the BSR code of the bank where it was deposited, the challan serial number, and the date of deposit. Part A can only be downloaded from TRACES — employers cannot manually prepare it.
Part B: Salary Breakup and Tax Computation
Part B is prepared by the employer and contains the complete salary computation. It starts with gross salary (basic + HRA + special allowance + all other allowances), then deducts exempt allowances under Section 10 (HRA exemption under Section 10(13A), LTA under Section 10(5), etc.) to arrive at taxable salary. Standard deduction under Section 16(ia) is then applied (₹75,000 under new regime or ₹50,000 under old regime for FY 2024-25). Professional tax under Section 16(iii) is also deducted. The resulting net salary is added to other income declared by the employee to compute gross total income. Chapter VI-A deductions (80C, 80D, 80CCD(1B), etc.) are then applied to arrive at total taxable income and the final tax liability.
Mandatory Issuance and Employer Obligations
Every employer who deducts TDS from salary under Section 192 must issue Form 16. If an employer does not deduct TDS (because the employee's income is below the taxable threshold), Form 16 is not required. Employers must file quarterly TDS returns in Form 24Q — the data in Form 24Q feeds into TRACES and enables Part A generation. Errors in Form 24Q (wrong PAN, wrong amount) result in incorrect Form 16 and incorrect Form 26AS entries, which can cause ITR processing issues.
Using Form 16 to File ITR
The Income Tax e-filing portal pre-fills ITR-1 and ITR-2 with salary data from Form 16 (via Form 26AS and AIS). You should verify the pre-filled data against your actual Form 16 Part B before submitting. Common discrepancies include: HRA exemption not reflected, deductions under 80C not pre-filled, or perquisite values differing. Always cross-check TDS in Part A against Form 26AS — if they differ, contact your employer to correct the TDS return before filing your ITR.