How to File ITR Using Form 16 – Step-by-Step Guide with 2026 Updates

Form 16 remains the single most important document for salaried ITR filing, containing everything from your salary breakup to your TDS details in one certificate — but recent format revisions mean even experienced filers should understand what's changed before assuming the process works exactly as it did last year. This guide walks through the complete filing process alongside the specific 2026 updates worth knowing.

This page covers:

• Understanding Form 16's two-part structure
• Top changes in Form 16 for FY 2024-25 filing
• Complete 11-step process to file ITR using Form 16
• Tips for accurate, error-free filing

Before diving into the filing process, it's essential to understand what Form 16 entails. Form 16 is issued under Section 203 of the Income Tax Act — a certificate showing the total salary paid to an employee and the amount of TDS during the year. It's divided into two parts:

• Part A: Includes employer's and employee's information (name, address, PAN, and TAN), a summary of tax deducted and deposited quarterly, and the employee's PAN
• Part B: An annexure with details of the employee's salary break-up, deductions under Chapter VI-A, and any other income disclosed by the employee
   

Form 16 is issued annually by the employer and is pivotal for filing ITR, as it provides all the necessary details required for the return.

The Central Board of Direct Taxes (CBDT) issued a notification on 20 February introducing a revised format for Form 16, applicable to FY 2024-25 (AY 2025-26), reflected as employers issue updated forms. The new format is designed to make salary breakups more detailed and easier to understand, so taxpayers can easily match Form 16 details with their Annual Information Statement (AIS) and Form 26AS — reducing mismatches and notices from the Income Tax Department.

Changes in standard deduction: The standard deduction for salaried taxpayers has increased under the new tax regime — from Rs. 50,000 to Rs. 75,000, effective FY 2024-25. This change is only for those opting for the new regime. If your employer deducted TDS based on the new regime, Form 16 will show the increased Rs. 75,000 deduction. However, if you switch to the old regime while filing, the deduction limits back to Rs. 50,000.

Taxes deducted from other incomes: Form 16 now shows tax deductions from sources other than salary, such as fixed deposit interest, and can show TCS on specific expenses like foreign travel or overseas remittances — but only if you've submitted Form 12BBA to your employer. This change, introduced after Union Budget 2024, lets salaried individuals report other taxable income and TCS-subject expenses to their employer, helping adjust overall TDS and prevent excess deduction.

NPS benefits: Under Section 80CCD(2), employees can claim a deduction for their employer's NPS contribution:Old regime

The enhanced deduction (additional 4%) only shows in Form 16 for employees who've opted for the new regime — if you later switch to the old regime while filing, the deduction limit reduces to 10%.

• Step 1 — Gather necessary documents: Form 16 from your employer, Form 26AS (Tax Credit Statement), salary slips, bank statements, proof of investments, deductions under Sections 80C/80D, and your home loan interest certificate if applicable
• Step 2 — Log in to the income tax e-filing portal: Visit the official portal and log in using your User ID (PAN), password, and date of birth
• Step 3 — Select the ITR form: Click 'Filing of Income Tax Return' and select the correct form — for salaried individuals, this is usually ITR-1 or ITR-2, depending on income sources
• Step 4 — Fill in personal information: Name, PAN, address, date of birth, and Aadhaar number — ensure these match your Form 16 details exactly
• Step 5 — Enter income details from Form 16: Refer to Part B for gross salary, exempt allowances (HRA, LTA), net salary after exemptions, and any other income
• Step 6 — Fill in TDS details: From Part A, enter the employer's TAN, employer's name, and TDS deducted and deposited
• Step 7 — Enter deductions and taxable income: Refer to Part B for Chapter VI-A deductions — Section 80C (PPF, NSC), Section 80D (medical insurance), Section 80E (education loan interest), Section 80TTA (savings account interest). Calculate total deductions and subtract from gross income
• Step 8 — Verify tax paid and compute liability: Compare TDS details in Form 16 with Form 26AS to ensure no discrepancies. Compute your tax liability using applicable slab rates
• Step 9 — Pay additional tax, if any: If additional tax is payable after TDS and other credits, pay online through the e-filing portal, generating a Challan 280
• Step 10 — Fill in bank details: Account number and IFSC code, for any tax refund or communication
• Step 11 — E-verify your returns: Submit the form to generate an acknowledgement number, then e-verify via Aadhaar OTP, EVC through net-banking, or a signed physical ITR-V sent to CPC, Bengaluru
   

E-verifying your return is the final, crucial step — completing it ensures your return is processed without delays. Many first-time filers overlook this final step, mistakenly believing that submitting the form alone completes the process, when in fact the ITR remains legally unfiled until e-verification is complete.

• Check for errors: Ensure all personal details and income figures match the documents provided
• Claim all deductions: Make sure you claim every eligible deduction under applicable sections to reduce your tax liability
• Cross-verify with Form 26AS: Always cross-verify TDS details in Form 16 with Form 26AS to avoid discrepancies
• Keep records: Maintain all supporting documents for investments, deductions, and other incomes in case of future queries
• Timely filing: File your ITR before the deadline to avoid penalties and interest

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Filing your ITR using Form 16 is genuinely straightforward once you understand its two-part structure and the recent format updates designed to reduce filing errors — following the complete step-by-step process ensures accurate, timely, and compliant tax filing each year.