India’s long-standing TDS certificate, Form 16, will be replaced by Form 130 starting April 1, 2026, marking a significant procedural change under the new Income-tax Act, 2025, and Income-tax Rules, 2026. The Central Board of Direct Taxes (CBDT) has introduced the new form to standardize tax documentation and streamline the filing process for salaried employees.
Form 130 retains the purpose of Form 16 certifying that tax has been deducted from salary income and deposited with the government but brings a more comprehensive and digital structure. It consists of three sections covering identification details, annual salary and tax summary, and a detailed computation of taxable income including exemptions, deductions, and dues.
In addition to salary income, Form 130 will also include pension and certain interest income for specified senior citizens, consolidating multiple reporting streams into a single document. It will be generated exclusively through the TRACES portal, eliminating manual issuance and ensuring consistency with quarterly TDS filings.
The transition will take effect in phases. For the 2025–26 financial year, employers will continue to issue Form 16 by June 2026. The first Form 130, covering the 2026–27 tax year, will be issued by June 15, 2027.
The revamp is part of a broader renumbering of tax forms. Form 16A will become Form 131, Form 26AS will be known as Form 168, and Forms 15G and 15H are being merged into a new Form 121.
According to the government, the update aims to minimize discrepancies between employer-reported data and taxpayer filings. With Form 130 linked directly to system-validated information, employees are expected to benefit from greater accuracy and pre-filled return data, though precision in employer submissions will become increasingly important.
Read Article: SEBI Teams Up with Google to Tackle Fake Trading Apps with Verified Badges
