Form 16 Part B is the annexure to your employer’s TDS certificate that shows how your salary was broken down for the financial year, which exemptions and deductions were applied, and how the final tax was computed. Part A records the TDS amounts deposited with the government; Part B shows the arithmetic behind them, moving from gross salary through exempt allowances and Chapter VI-A deductions to net tax payable. You use it primarily to file your income tax return, and every figure on it should be checked against your own records before it goes into the ITR.
Why Your Tax Regime Decides What Part B Shows
The regime your employer used to compute TDS during the year determines which rows on Part B carry real numbers. Since FY 2023-24, the new tax regime under Section 115BAC is the default for individual taxpayers. If you did not explicitly opt out with your employer, your Part B was prepared under the new regime.1Income Tax Department. Salaried Individuals for AY 2026-27
Under the new regime, most Chapter VI-A deductions (Sections 80C, 80D, 80G, and others) are unavailable, and common exempt allowances like House Rent Allowance and Leave Travel Concession appear as zero. Under the old regime, those rows are populated. If your Part B shows blank deduction rows despite investment proofs you submitted, it almost certainly means TDS was computed under the new regime.
For salaried employees without business income, the regime can be switched each year directly in the ITR without a separate form. But whatever regime the employer used through the year is what the numbers on Part B reflect.1Income Tax Department. Salaried Individuals for AY 2026-27
Gross Salary and Section 10 Exemptions
The top of Part B lists your total gross salary in three categories defined by Section 17 of the Income Tax Act. Section 17(1) covers basic pay, dearness allowance, bonuses, advances, commissions, and leave encashment. Section 17(2) covers perquisites: non-cash benefits like company housing, concessional rent, or personal expenses your employer paid on your behalf. Section 17(3) covers profits in lieu of salary, such as severance payments or lump sums received from unrecognized provident funds.2Indian Kanoon. Income Tax Act 1961 – Section 17
Below the gross salary total, Part B subtracts exempt allowances under Section 10. Common entries are HRA exemption under Section 10(13A), Leave Travel Concession under Section 10(5), and prescribed allowances under Section 10(14) for expenses incurred in the course of duty.3Central Board of Direct Taxes. CBDT e-Filing ITR 1 Validation Rules Gratuity and leave encashment exemptions also appear on this block. Subtracting these from gross salary gives the figure labelled “Income chargeable under the head Salaries.”
Under the new regime, these Section 10 exemption rows show zero, because the regime does not permit most of them.3Central Board of Direct Taxes. CBDT e-Filing ITR 1 Validation Rules
Standard Deduction and Professional Tax
Section 16 provides two further reductions before any voluntary deductions. The standard deduction is a flat amount requiring no proof; for FY 2025-26 under the new regime it is ₹75,000. Professional tax (or employment tax) is levied by some state governments and deducted by your employer; the amount varies by state and appears on its own line.
After subtracting the standard deduction and professional tax from “Income chargeable under the head Salaries,” Part B reaches “Gross Total Income.” If you did not declare other income to your employer, that figure moves straight into the deductions section.
Chapter VI-A Deductions
The Chapter VI-A block lists deductions that reduce gross total income to arrive at net taxable income. Most of these disappear under the new regime.
Under the old regime, the entries you are most likely to see are:
- Section 80C, up to ₹1,50,000, covering life insurance premiums, PPF contributions, ELSS mutual funds, tuition fees, and home loan principal repayment.4Income Tax Department. Deductions
- Section 80D, up to ₹1,00,000, for health insurance premiums covering yourself, spouse, children, and parents, plus preventive health check-ups.4Income Tax Department. Deductions
- Section 80CCD(1B), an additional ₹50,000 for NPS contributions beyond the 80C ceiling.5National Pension System Trust. Tax Benefits Under NPS
- Section 80G for donations to registered charitable organizations, with percentage limits that vary by institution.
Under the new regime, the only Chapter VI-A deduction available to most salaried employees is Section 80CCD(2), your employer’s contribution to NPS, deductible up to 14% of your salary (basic plus dearness allowance).1Income Tax Department. Salaried Individuals for AY 2026-27 Everything else in this block will be blank.
The result after applicable deductions is your “Total Income” or “Net Taxable Income,” which the employer uses to compute tax.
Tax, Cess, Surcharge, and Rebate
Part B then applies slab rates to net taxable income. For FY 2025-26 under the new regime, the Union Budget 2025 introduced revised slabs starting from a nil rate on income up to ₹4,00,000, with the highest rate of 30% on income above ₹24,00,000. The old regime retains its existing structure: nil up to ₹2,50,000 and 30% above ₹10,00,000.
Two components sit on top of the base tax:
- Health and Education Cess of 4% on income tax plus any surcharge. This replaced the earlier 3% education cess from FY 2018-19.6Sansad. Lok Sabha Unstarred Question 706 – Cesses and Surcharges
- Surcharge, which applies only if net taxable income exceeds ₹50,00,000. The rate is 10% between ₹50 lakhs and ₹1 crore, 15% between ₹1 crore and ₹2 crore, and up to 25% above ₹2 crore under the new regime. Under the old regime, a 37% rate can apply above ₹5 crore.1Income Tax Department. Salaried Individuals for AY 2026-27
If your income only just crosses a surcharge threshold, marginal relief prevents the additional tax from exceeding the additional income that pushed you over. The employer applies this automatically, but confirm it appears if you sit near the ₹50-lakh or ₹1-crore boundary.
Section 87A provides a rebate that can bring tax to zero within income thresholds. For FY 2025-26 under the new regime, resident individuals with taxable income up to ₹12,00,000 receive a rebate of up to ₹60,000, making their tax nil. Under the old regime, the rebate is up to ₹12,500 for income up to ₹5,00,000.7Income Tax Department. Section 87A
If you received arrears or advance salary that bunched income from multiple years into one, Section 89 provides relief. The employer computes the tax with and without the arrears and applies the lower figure. To actually claim this relief when filing your ITR, you must file Form 10E on the income tax portal before submitting the return. Skip that step and the department will process the return but deny the relief.8Income Tax Department. Form 10E User Manual
Part B ends with “Net Tax Payable,” the balance after comparing computed tax against TDS already deposited (Part A). A positive figure means more tax may be due; a negative figure suggests a refund.
Verify Part B Before You File
The most common mistake is copying Part B straight into the ITR without checking it. Three cross-references catch most errors.
First, your salary slips. Add up twelve months of basic pay, HRA, allowances, and bonuses. The total should match gross salary in Part B. Gaps usually come from mid-year revisions, arrears, or one-time payments booked in an unexpected month.
Second, Form 26AS on the income tax portal. This consolidated statement shows every TDS deposit made against your PAN. The Form 26AS total should match TDS in Part A. A gap can mean the employer deposited late or filed with an incorrect PAN or challan number.
Third, the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) on the portal. These pull data from banks, mutual funds, and other reporting entities alongside your employer’s filings. Income that shows in AIS but not in Form 16 (interest from a fixed deposit, for example) needs to be reconciled before filing. When you find a mismatch, you can submit feedback on the AIS page; the reporting entity then has ten days to respond.
When You Get Part B and What Makes It Valid
Employers must file the fourth-quarter e-TDS return (Form 24Q) by May 31 after the financial year ends, and then have 15 days to issue Form 16, which puts the effective deadline at June 15. The document is generated through the TRACES portal (tdscpc.gov.in), and only certificates downloaded from TRACES qualify as valid TDS certificates.9TRACES. E-Tutorial – Download Form 16 (Part-A and Part-B)
A valid Form 16 shows the employer’s TAN and your PAN, and carries a digital signature; without a valid signature it does not hold up as a TDS certificate. The form is generated only for valid PANs, so if your PAN was captured incorrectly in the TDS return, no Form 16 is produced at all.9TRACES. E-Tutorial – Download Form 16 (Part-A and Part-B)
If you worked for more than one employer during the year, each issues Part A for its own period. Part B can be issued by each employer separately or, at your option, consolidated by the last employer.10TRACES. Form No. 16 – See Rule 31(1)(a)
If Form 16 Is Missing or Wrong
If June 15 passes without your Form 16, contact payroll or HR. Employers face a penalty of ₹100 per day while the default continues. The absence of Form 16 does not excuse you from filing: you can file using salary slips together with the TDS data in Form 26AS and AIS.
Errors in the figures — wrong salary, missing deductions, incorrect TDS — need to be raised with the employer, who corrects them by filing a revised TDS return through TRACES. Once the revision is processed, an updated Form 16 is generated and corrected TDS reflects in Form 26AS.
When filing your ITR, always report the correct income and deductions based on your own records, even where Form 16 still carries an uncorrected error. Reporting inflated salary because the employer got it wrong creates problems later. Keep payslips, bank statements, and investment receipts to support the figures you enter, in case the return is picked for verification.
Moving Part B Into Your ITR
For most salaried taxpayers, ITR-1 (Sahaj) is the right form when total income is under ₹50 lakhs and comes from salary, one house property, and other sources like interest. The portal’s pre-fill feature pulls from your employer’s TDS filings, but the numbers can lag, and Part B is your primary reference for verifying or entering figures manually.
The key transfers are:
- Gross salary from Part B goes to “Income from Salary” in the ITR.
- Section 10 exempt allowances are entered separately to reduce the salary figure.
- Standard deduction and professional tax are claimed under Section 16 in the ITR.
- Chapter VI-A deductions (80C, 80D, 80CCD, and others) each have their own row.
- Tax payable and TDS are recomputed by the ITR from your inputs and should match Part B if the underlying figures are identical.
If you choose a different regime in the ITR from the one your employer used for TDS, the computed tax will differ from Part B. That is normal. You will either owe additional tax, paid by challan before filing, or receive a refund after processing. The ITR due date for salaried individuals is typically July 31 of the assessment year, meaning July 31, 2026 for FY 2025-26 income.