Form 16 replacement: Form No. 130 Under the Income-tax Act, 2025

What is Form No. 130?

Form No. 130 is the annual Tax Deducted at Source certificate prescribed under the Income-tax Act, 2025 for:

• Salary paid to an employee under section 392
• Eligible pension and interest income paid by a specified bank to a specified senior citizen under section 393(1)

The form provides details of the income paid, tax deducted or paid, tax deposited with the Central Government, exemptions, deductions and the resulting tax computation.

It also enables an employee or specified senior citizen to verify the TDS deducted and claim the corresponding tax credit while filing the return of income.

When did Form No. 130 become applicable?

The Income-tax Act, 2025 and the Income-tax Rules, 2026 came into force from 1 April 2026.

Accordingly, Form No. 130 applies to salary and eligible specified-senior-citizen income relating to Tax Year 2026–27 onwards.

The first Form No. 130 for salary paid during Tax Year 2026–27 will therefore ordinarily be issued by 15 June 2027.

Legal provisions governing Form No. 130

Section 392: Deduction of tax from salary

Section 392 of the Income-tax Act, 2025 requires a person responsible for paying income chargeable under the head “Salaries” to deduct income tax at the time of payment.

Tax is deducted at the average rate applicable to the employee’s estimated salary income for the relevant tax year.

While calculating salary TDS, the employer may consider prescribed information furnished by the employee, including:

• Salary received from another employer
• Eligible tax relief
• Loss under the head “Income from house property”
• Income chargeable under another head
• TDS or TCS relating to the same tax year

Section 392 broadly corresponds to section 192 of the Income-tax Act, 1961.

Section 395: TDS certificate

Section 395(4) requires a person deducting or collecting tax to issue a certificate specifying:

• The amount of tax deducted or collected
• The rate at which tax was deducted or collected
• Other prescribed particulars

The provision also covers eligible cases where an employer pays tax on behalf of an employee in respect of non-monetary perquisites.

Rule 215: Prescribed form and due date

Rule 215 of the Income-tax Rules, 2026 prescribes Form No. 130 for tax deducted or paid under:

• Section 392, subject to the exclusions prescribed in the rule
• Section 393(1), in the case of an eligible specified senior citizen

The certificate must be generated and downloaded from the web portal specified by the Income Tax Department.

Form 16 and Form No. 130: Key differences

Form No. 130 is therefore not merely a renamed Form 16. Its reporting structure has been reorganised and includes separate annexures for employees and specified senior citizens.

Who must issue Form No. 130?

Form No. 130 must be issued by:

1. An employer who has deducted tax from an employee’s salary under section 392
2. A specified bank that has deducted tax on eligible pension and interest income of a specified senior citizen under section 393(1)

The employee or senior citizen does not prepare Form No. 130. It must be generated and issued by the employer or specified bank after the applicable TDS statement has been filed and processed.

What information does Form No. 130 contain?

Form No. 130 consists of Part A, Part B and Part C.

Part A: Identification details

Part A contains identification details of the employer or specified bank, such as:

• Name and address
• Permanent Account Number
• Tax Deduction and Collection Account Number
• Email address and contact number
• Relevant tax year
• Period of employment

It also records the name, address and PAN of the employee or specified senior citizen.

Part B: Payment and TDS details

Part B contains a summary of:

• Amount paid or credited
• Applicable rate of tax deduction
• Tax deducted
• Tax deposited or adjusted
• Quarterly TDS statement receipt numbers
• Challan details
• Book-adjustment details, where applicable

It also contains a declaration by the person responsible for deducting tax.

Part C, Annexure I: Details relating to employees

Part C, Annexure I applies where tax is deducted from salary under section 392. It may contain:

• Salary, perquisites and profits in lieu of salary
• Salary received from other employers
• Exempt allowances
• Deductions from salary
• Income chargeable under the head “Salaries”
• Other income reported to the employer
• Loss under the head “Income from house property”
• Deductions under the applicable chapter of the Act
• Total taxable income
• Rebate, surcharge and health and education cess
• Eligible tax relief
• TDS and TCS considered by the employer
• Net tax payable

The form also records the relevant tax-regime position considered while computing salary TDS.

Part C, Annexure II: Specified senior citizens

Part C, Annexure II applies where a specified bank deducts tax in respect of an eligible specified senior citizen. It may include:

• Pension income
• Interest income paid by the specified bank
• Eligible deductions
• Total taxable income
• Rebate, surcharge and cess
• Eligible relief
• Net tax payable

How is Form No. 130 generated?

An employer or specified bank cannot issue a valid Form No. 130 merely by preparing it through payroll or accounting software.

The deductor must generally:

1. File the applicable quarterly TDS statement in Form No. 138
2. Wait for the statement and its annexures to be processed
3. Generate and download Form No. 130 through TRACES
4. Verify the information contained in the certificate
5. Authenticate it digitally or manually
6. Provide it to the employee or specified senior citizen

Due date for issuing Form No. 130

Form No. 130 must ordinarily be issued by 15 June of the financial year immediately following the relevant tax year.

For example, Form No. 130 for salary paid during Tax Year 2026–27 must ordinarily be issued by 15 June 2027.

What happens when an employee changes jobs?

Where an employee works for more than one employer during a tax year:

• Each employer must issue Parts A and B for the respective period of employment
• Part C, Annexure I may be issued separately by each employer or by the last employer, depending on the prescribed option and information furnished

The employee should provide the current employer with details of salary and TDS from the earlier employer so that tax can be calculated on aggregate salary, where applicable.

Can Form No. 130 be corrected?

An employee cannot directly edit Form No. 130.

Where the salary, PAN, deduction, exemption or TDS information is incorrect, the employer or specified bank must file a correction or revised TDS statement in Form No. 138.

After the correction statement is processed, a corrected Form No. 130 can be generated and issued.

Can a duplicate Form No. 130 be issued?

Yes. If the original certificate is lost, the deductor may issue a duplicate Form No. 130.

The duplicate certificate should clearly indicate that it is a duplicate.

Is Form No. 130 attached to the income-tax return?

No. Form No. 130 is not required to be physically or electronically attached to the return of income.

It should, however, be preserved as supporting documentation for:

• Salary or pension income
• Eligible deductions and exemptions
• Interest income covered by the specified-senior-citizen provisions
• Tax deducted at source
• Tax deposited on behalf of the taxpayer

Taxpayers should also reconcile the certificate with the applicable Annual Information Statement and tax-credit information before filing the return.

What should an employee verify in Form No. 130?

Before using Form No. 130 for return filing, verify:

• Name and PAN
• Employer’s name and TAN
• Period of employment
• Gross salary
• Taxable allowances
• Exempt allowances
• Perquisites and profits in lieu of salary
• Standard deduction and other eligible deductions
• Tax regime considered by the employer
• Total taxable income
• TDS deducted and deposited
• Salary and TDS from previous employers

Common mistakes relating to Form No. 130

Using Form No. 130 for FY 2025–26

Salary for FY 2025–26 remains governed by the Income-tax Act, 1961. The employer must issue Form 16 for that period, even though the certificate is issued after 1 April 2026.

Accepting a certificate prepared outside TRACES

A certificate independently created through payroll or accounting software may not qualify as a valid Form No. 130 unless it has been generated through the prescribed portal process.

Assuming the certificate contains all income

Form No. 130 may contain other income disclosed to the employer, but it may not include undisclosed bank interest, capital gains, rental income, foreign income or business income.

Ignoring salary from an earlier employer

Where an employee changes jobs, salary and TDS from all employers must be considered while preparing the income-tax return.

Claiming TDS without reconciliation

The TDS shown in Form No. 130 should be reconciled with the Department’s applicable tax-credit records. Any mismatch should be taken up with the employer or specified bank.

Transitional treatment of older Form 16 certificates

Corrections relating to salary and TDS for periods ending on or before 31 March 2026 continue under the Income-tax Act, 1961 and the earlier form framework.

Therefore, an error in Form 16 for FY 2025–26 must be corrected through the earlier TDS statement and Form 16 process. It should not be converted into Form No. 130.

Key takeaway

Employees and specified senior citizens should carefully verify the income, deductions, tax regime, personal details and TDS reported in Form No. 130 before using it for income-tax return filing.

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