ITR Filing 2025: Form 16 Will Come in a New Format – Here’s What You Need to Know

The new financial year has already started from April 1, 2025, and taxpayers across India are preparing to file their ITR (Income Tax Returns) for the previous year. The Income Tax Department is expected to announce the filing forms for the financial year 2024-25 (Assessment Year 2025-26) soon. As the deadline gets closer, it is important for taxpayers to have all the necessary documents ready to make the ITR filing process easy and error-free.

One of the most important documents for salaried people is Form 16, which is issued by employers. It contains key information about an employee’s salary and the tax deducted at source (TDS) during the financial year. Understanding Form 16 is important for both employees and employers because it helps in filing ITR correctly and following tax rules.

What is Form 16?

Form 16 is proof that the employer has deducted TDS from an employee’s salary and deposited it with the Income Tax Department. It summarises the total income earned and the taxes paid by the employee.

If you changed jobs during the financial year, you must collect Form 16 from every employer you worked with. Form 16 is divided into two parts – Part A and Part B.

Read More, Income Tax Return 2025: Filing Dates, ITR Form Types, and How to File Online.

What is Included in Part A?

Part A gives important details about the taxes deducted by the employer and submitted to the government every quarter. It includes:

• Employee’s name, address, and PAN (Permanent Account Number)

• Employer’s TAN (Tax Deduction and Collection Account Number) and PAN
  It helps employees cross-check the TDS entries with their payslips.

What is Included in Part B?

Part B is an annexure to Part A and contains a full breakdown of the employee’s salary and deductions allowed under different sections of the Income Tax Act.
It shows:

• Exemptions under Section 10 (like House Rent Allowance and other allowances)

• Deductions under Sections 80C and 80D (such as life insurance premiums, health insurance premiums, and contributions to the Public Provident Fund – PPF)

Why Form 16 is Important

Form 16 is very important for multiple reasons:

• It is needed for filing your ITR properly.

• It is used as proof of income when applying for loans. Many banks and financial institutions check Form 16 to assess loan eligibility.

• If you have paid extra TDS, Form 16 helps you claim a tax refund.

Thus, Form 16 is an essential document for managing taxes and ensuring a smooth return filing process.

Changes in Form 16

The Income Tax Department will soon announce the new guidelines for filing returns. Taxpayers should stay updated to avoid last-minute problems.

Salaried employees should note that some changes have been made to the Form 16 format, especially regarding tax deductions and perquisites. These changes aim to present all information about salary, taxes, deductions, and exemptions in a much clearer way.

What Has Changed in Form 16?

In the new format of Form 16:

• Taxpayers will now get more detailed information compared to the old format.

• Earlier, Form 16 included only basic details.

• Now, it will clearly show:
  • Which allowances are tax-exempt

  • How much tax has been deducted

  • Which salary components are taxable

This update will reduce confusion while filing ITR and will make the entire process much simpler and more transparent.

Final Note

As the new tax season begins, it is important to understand the changes in Form 16 and ensure that you have all your important documents ready. This preparation will help you file your returns accurately, claim eligible deductions, and avoid last-minute errors.

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