Form 16, and the part you cannot generate yourself
The annual salary TDS certificate — where Part A must come from TRACES, and Part B must reconcile with payslips you already issued.
What it is
The annual TDS certificate for salary. Part A: tax deducted and deposited. Part B: the salary and tax computation.
Where Part A comes from
The TRACES portal, generated from your filed Form 24Q. Not from your payroll software.
The trap
A hand-made Part A. However neat the spreadsheet, it is not a valid certificate.
Form 16 is the annual salary TDS certificate an employer issues to an employee. Part A shows tax deducted and deposited, generated from the TRACES portal; Part B shows the salary breakup, exemptions, deductions and the tax computation the employer used.
How it works in practice
Employees need it to file returns. Issuing it late is the single most common HR complaint in June and July.
What to watch for
Part A must come from TRACES — a self-made Part A is not valid, however neat the spreadsheet.
How Klok handles it
Klok produces the Part B inputs from the actual payroll runs, so the numbers reconcile with the payslips already issued.
Form 16 FAQs
When must Form 16 be issued?
By the statutory due date following the end of the financial year. Late issue is the most common HR complaint of June and July, and it is almost always caused by late Form 24Q filing rather than by payroll.
What if the numbers do not match the payslips?
Then something changed after the payslips were issued — a late arrear, a revised declaration, a correction. Reconcile before issuing, because the employee will reconcile after.
Do we issue Form 16 to someone who left mid-year?
Yes, for the period they were employed. They will need it alongside the certificate from their next employer to file a complete return.
An employee joined mid-year. Do we report their previous salary?
Only if they declared it to you. Where they did, include it so the tax computed is correct; where they did not, your Form 16 covers your employment period alone — and the employee may face a shortfall at filing that they will ask you about.
The employee says Form 16 does not match their payslips. Who is right?
Usually both. Form 16 reports the tax year on a paid basis and includes perquisites and previous-employer salary; payslips show a month at a time. The reconciliation is between what was paid in the year and what the payslips add up to — arrears are the usual culprit.
Can we issue Form 16 before the quarterly return is filed?
Part A is generated from the filed return, so issuing before filing means issuing something unverified. It also guarantees a mismatch if the return is later corrected.
An employee left in August. Do they get a Form 16?
Yes, for the period they were employed. Exit does not remove the obligation, and withholding it until full-and-final is settled is a common but unhelpful practice — the two are unrelated.
Stop calculating this by hand
Klok computes it from your own attendance and salary data, every month, with the working shown.