Every year your employer asks you to "declare investments" in April and "submit proofs" around January. Then in June you get a Form 16. These three steps decide how much tax is cut from your salary, and from tax year 2026-27 the forms have new names. Here's the whole cycle in plain language.
The yearly cycle at a glance
| When | What happens | Why it matters |
|---|---|---|
| April–May | You choose old or new regime and declare planned investments and rent | Sets how much TDS is cut each month |
| Through the year | Employer deducts TDS from salary every month | Spreads your tax over 12 months |
| December–February | You submit actual proofs (rent receipts, premium receipts, loan certificate) | Employer recalculates; shortfall is cut from the last salaries |
| By 15 June | Employer issues Form 16 (Form 130 from tax year 2026-27) | Summary of salary and tax for your return |
| By 31 July | You file your income tax return | Final settlement: refund or extra tax |
Old form names vs new form names
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, and the Income-tax Rules, 2026 renumbered the forms. The purpose of each form is the same; only the number changed.
| What it is | Until FY 2025-26 | From tax year 2026-27 |
|---|---|---|
| Your declaration of HRA, LTA, home loan and deductions to the employer | Form 12BB | Form 124 |
| TDS certificate from employer for salary | Form 16 | Form 130 |
| Annual tax statement showing all TDS against your PAN | Form 26AS | Form 168 |
| Declaration for no TDS on interest (low income / senior citizen) | Form 15G / 15H | Form 121 |
The Form 16 you receive in June 2026 is for FY 2025-26, so it is still a Form 16 under the old Act. The first Form 130 will come in 2027, for tax year 2026-27. Many employers and HR teams will keep saying "Form 16" for a while; it's the same document.
Step 1: the investment declaration (April)
At the start of the year, your employer asks two things: which tax regime you want for TDS, and, if you pick the old regime, what you expect to claim. This is an estimate. Nobody checks it yet, and you don't attach anything.
- Declare realistically. If you overstate, too little tax is cut and the shortfall lands on your last two or three payslips.
- Declaring low is safe. If you invest more later, you'll get it back via the proofs or your return.
- The regime choice here is only for TDS. If you don't have business income, you can still pick the other regime when you file your return.
Step 2: submitting proofs (December–February)
Near the end of the year, payroll asks for evidence of what you declared, usually through an HR portal, along with a signed Form 124 (earlier Form 12BB). The employer then recalculates your tax with only what you proved. If you proved less than you declared, the extra tax is deducted from the remaining salaries, which is why February and March payslips sometimes shrink sharply.
If you chose the new regime, you can usually skip this step. The new regime doesn't allow HRA, 80C, 80D or home loan interest on a self-occupied house, so there's nothing to prove.
Which proof for which deduction (old regime)
| Claim | What to submit | Watch out for |
|---|---|---|
| HRA exemption | Rent receipts or rent agreement, plus landlord's PAN if rent is over ₹1 lakh a year | Rent paid to your spouse is not accepted; rent to parents is fine if it is real and they declare it |
| 80C (up to ₹1.5 lakh) | PPF passbook, ELSS statement, LIC receipts, tuition fee receipts, home loan principal certificate | Your own PF contribution already counts; check how much room is left |
| 80D health insurance | Premium receipt showing who is covered | Limit is ₹25,000 for your family and another ₹25,000 for parents (₹50,000 each if senior citizens) |
| Home loan interest | Interest certificate from the bank, with lender's name and address | Up to ₹2 lakh for a self-occupied home |
| NPS (own extra contribution) | NPS transaction statement | Extra ₹50,000 over the 80C limit |
| LTA | Tickets or boarding passes for the journey | Only travel cost within India, and only two journeys in a four-year block |
Step 3: reading your Form 16
Form 16 (Form 130 from tax year 2026-27) has two parts:
- Part A is generated from the government's TRACES portal. It lists the employer's TAN, your PAN, and the TDS deposited each quarter. If tax was cut but isn't in Part A, the employer hasn't deposited it, so raise it with HR.
- Part B is prepared by the employer. It shows gross salary, exempt allowances like HRA, the standard deduction, the deductions they allowed, taxable income and the tax worked out.
Before you use it, check four things:
- Your PAN and name are correct.
- The TDS in Part A matches your annual tax statement (Form 26AS, Form 168 from 2026-27) and your AIS.
- The regime shown is the one you chose.
- If you changed jobs, you have a Form 16 from each employer.
Worked example: proofs short by ₹60,000
Neha (old regime, 30% slab) declared ₹1.5 lakh of 80C in April. By February she had only invested ₹90,000. Her employer recalculates with ₹90,000, so her taxable income rises by ₹60,000 and her tax rises by about ₹18,720 (30% plus 4% cess). That amount is cut from her February and March salaries.
If she then invests the remaining ₹60,000 in PPF before 31 March, she can claim the full ₹1.5 lakh in her return and get ₹18,720 back as a refund.
If you missed the proof deadline
Nothing is lost. The employer's calculation is only for TDS. You can claim any deduction you actually qualify for directly in your income tax return. Keep the proofs safe for at least six years, as the tax department can ask for them. The cost is only cash flow: more tax is cut now and comes back later as a refund.
Filing your return with Form 16
- Download your AIS and annual tax statement from the income tax portal and match them with Form 16.
- Add income that isn't in Form 16: savings and FD interest, rent you received, capital gains, freelance income.
- Pick your regime. The old regime is available only if you file by the due date (usually 31 July for salaried people).
- Claim any deduction the employer didn't allow, if you have the proof.
- Pay any balance tax before filing, or wait for the refund after you e-verify the return.
Not sure which regime to use? Read old vs new tax regime or run both in the income tax calculator.
Frequently asked questions
Has Form 16 been renamed?
Yes. Under the Income-tax Rules, 2026, the salary TDS certificate is Form 130 from tax year 2026-27, and the employee declaration Form 12BB is Form 124. The Form 16 issued in June 2026 for FY 2025-26 is still a Form 16.
When will I get my Form 16?
Employers must issue it by 15 June after the end of the tax year. For FY 2025-26 that was 15 June 2026; for tax year 2026-27 it will be 15 June 2027.
I did not submit investment proofs. Can I still claim deductions?
Yes. Claim them in your income tax return. Your employer will have deducted more TDS, which comes back as a refund once your return is processed. Keep the proofs in case the department asks.
Do I need to submit proofs under the new regime?
Usually not. The new regime does not allow HRA, 80C, 80D or home loan interest on a self-occupied home. The employer’s NPS contribution is handled by payroll itself.
Is landlord PAN mandatory for HRA?
Only if the rent you pay is more than ₹1 lakh in the year. Below that, rent receipts or a rent agreement are enough. If your landlord has no PAN, a signed declaration from the landlord is usually accepted.
I changed jobs this year. What do I do with two Form 16s?
Add the salary from both in your return. Each employer gave you the standard deduction and the zero-tax slab separately, so you may owe extra tax. Tell your new employer about the previous salary to avoid a surprise.
The TDS in my Form 16 is missing from my annual tax statement. What now?
Your employer has either not deposited it or filed the TDS return with a mistake. Ask HR to correct the TDS return. You get credit only for TDS that appears against your PAN.
Can my employer refuse to issue Form 16?
No. If tax was deducted from your salary, the employer must issue the certificate. If no tax was deducted, they may not issue one, but you can still file your return using your payslips and AIS.