Form 16 issuance checklist for CAs

Form 16 is the single most-asked-for compliance artefact by employees in June. Issuing it late or with errors creates support load for the employer and reputational risk for the CA. Use this checklist for each client before sending Form 16 to employees.

Before you begin

[ ] All monthly payroll runs for the financial year are FINALIZED.
[ ] TDS returns (24Q) for all four quarters are filed and match the payroll totals.
[ ] Part A is downloaded from the TRACES portal and contains the correct TRACES certificate number.
[ ] Part B is computed from the finalized payroll data and reconciles with Part A.
[ ] The employer’s TAN, PAN and address in Part A match the registered details.

Part A checks

[ ] Certificate number from TRACES is printed on Part A.
[ ] Employee PAN matches the PAN on Part A.
[ ] Employer TAN and PAN are correct.
[ ] Summary of tax deducted equals the sum of all 24Q entries for the employee.
[ ] The assessment year is the correct one (e.g. 2026–27 for FY 2025–26).

Part B checks

[ ] Salary under section 17(1) matches the sum of gross salary across the FY.
[ ] HRA exemption is calculated under section 10(13A) only for the old tax regime.
[ ] Standard deduction of ₹50,000 is applied under section 16(ia).
[ ] Chapter VI-A deductions are matched against the employee’s actual proofs.
[ ] Taxable income and TDS reconcile with Part A.
[ ] Cess at 4% is added to the computed tax.
[ ] Refundable or payable balance is clearly stated.

Regime-specific checks

Old regime

[ ] HRA exemption computed correctly using the least of the three rules.
[ ] Section 80C, 80D and other deductions capped correctly.
[ ] Professional tax deducted during the year is shown under section 16(iii).

New regime

[ ] No HRA exemption or most Chapter VI-A deductions claimed.
[ ] Standard deduction of ₹50,000 is still allowed.
[ ] Tax computed as per new regime slabs.

Digital issuance

[ ] Form 16 is password-protected if sent by email (password is usually employee DOB in DDMMYYYY).
[ ] Email subject clearly states the financial year and employer name.
[ ] A copy is saved on the employer’s records for at least 7 years.
[ ] A delivery log is maintained: employee, PAN, date sent, method.

Common mistakes to avoid

Issuing Part B before all payroll runs are finalized.
Forgetting to add the 4% health and education cess.
Using gross salary instead of taxable salary under section 17(1).
Missing refunds because TDS paid was higher than final tax.
Sending Form 16 to employees who left the organisation mid-year without matching their payslip period.

Co-branding note

CAs may co-brand this checklist with their firm logo and distribute it to clients. The technical content should be reviewed against the current Income Tax Act and CBDT notifications before sharing.

Before you begin

[ ] All monthly payroll runs for the financial year are FINALIZED.

[ ] TDS returns (24Q) for all four quarters are filed and match the payroll totals.

[ ] Part A is downloaded from the TRACES portal and contains the correct TRACES certificate number.

[ ] Part B is computed from the finalized payroll data and reconciles with Part A.

[ ] The employer’s TAN, PAN and address in Part A match the registered details.

Part B checks

[ ] Salary under section 17(1) matches the sum of gross salary across the FY.

[ ] HRA exemption is calculated under section 10(13A) only for the old tax regime.

[ ] Standard deduction of ₹50,000 is applied under section 16(ia).

[ ] Chapter VI-A deductions are matched against the employee’s actual proofs.

[ ] Taxable income and TDS reconcile with Part A.

[ ] Cess at 4% is added to the computed tax.

[ ] Refundable or payable balance is clearly stated.

Regime-specific checks

Old regime

[ ] HRA exemption computed correctly using the least of the three rules.

[ ] Section 80C, 80D and other deductions capped correctly.

[ ] Professional tax deducted during the year is shown under section 16(iii).

New regime

[ ] No HRA exemption or most Chapter VI-A deductions claimed.

[ ] Standard deduction of ₹50,000 is still allowed.

[ ] Tax computed as per new regime slabs.

Digital issuance

[ ] Form 16 is password-protected if sent by email (password is usually employee DOB in DDMMYYYY).

[ ] Email subject clearly states the financial year and employer name.

[ ] A copy is saved on the employer’s records for at least 7 years.

[ ] A delivery log is maintained: employee, PAN, date sent, method.

Common mistakes to avoid

Issuing Part B before all payroll runs are finalized.

Forgetting to add the 4% health and education cess.

Using gross salary instead of taxable salary under section 17(1).

Missing refunds because TDS paid was higher than final tax.

Sending Form 16 to employees who left the organisation mid-year without matching their payslip period.