Every Indian employer who has ever issued a Form 16 needs to read this — the certificate you have been giving employees for decades is officially replaced, and the deadline is April 1, 2026.
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What Exactly Changed: Form 16 → Form 130
The Government of India enacted the new Income Tax Act 2025 to comprehensively replace the Income Tax Act 1961. As part of this overhaul, all tax certificates and forms have been renumbered and updated with enhanced disclosure requirements, effective April 1, 2026.
⚠️ Immediate Action Required
Form 16 is no longer valid from April 1, 2026. Any payroll software, template, or process that generates “Form 16” must be updated to generate Form 130 before TDS certificates for FY 2025-26 are issued (due by May 31, 2026).
The transition is straightforward in concept but far-reaching in practice. The new Form 130 retains the purpose of Form 16 — certifying TDS deducted from salary — but introduces a more detailed breakdown of salary components and tax computations, aligned with the revised income tax slabs and deductions under the new Act.
- 3 Major form replacements under the IT Act 2025
- 6 Days left to update your payroll system (from March 26)
- May 31 Deadline to issue Form 130 to all employees
