Form 16 for FY 2025-26: The June 15, 2026 Employer Deadline, the Rs 100 Per Day Penalty, and the Pre-Issue TRACES Checklist
Quick Summary: The Form 16 Deadline in Five Lines
- Deadline: Employers must issue Form 16 for FY 2025-26 by 15 June 2026. As of 2 June 2026 that is 13 days away.
- Source: The due date sits in Rule 31(3) of the Income-tax Rules, 1962; the certificate itself is issued under Rule 31(1)(a).
- Penalty: Late or non-issue attracts Rs 100 per day, per certificate, under Section 272A(2)(g) of the Income-tax Act, 1961, capped at the amount of tax deductible.
- Prerequisite: You cannot generate Part A from TRACES unless all four Form 24Q statements for FY 2025-26 are filed (Q4 was due 31 May 2026).
- Period note: FY 2025-26 salary income is assessed in AY 2026-27, which is still governed by the Income-tax Act, 1961. Issue the certificate in the CBDT-prescribed TRACES format rather than re-numbering sections by hand.
Why 15 June 2026 Is the Date Every Employer Should Have Circled
Form 16 is the TDS certificate an employer gives a salaried employee. It proves how much tax was deducted at source on salary under Section 192 during the financial year, and it is the document the employee, or their CA, uses to file the income tax return. For FY 2025-26 (the year that ended on 31 March 2026), the statutory deadline for employers to issue Form 16 is 15 June 2026.
This deadline is fixed by Rule 31(3) of the Income-tax Rules, 1962, which requires the salary TDS certificate to be furnished by 15 June following the financial year in which the tax was deducted. It is not a soft target. Miss it, and the cost is measured in rupees per day, which we break down below.
This year carries an extra wrinkle. FY 2025-26 is the last full year that ran entirely under the Income-tax Act, 1961, before the Income-tax Act, 2025 took effect on 1 April 2026. We explain why the FY 2025-26 return is still a 1961 Act return in our ITR forms AY 2026-27 practitioner advisory. That period question matters for Form 16 too, and we address it directly further down.
The Penalty: Rs 100 a Day, and How It Adds Up
Failure to issue Form 16 by 15 June 2026 attracts a penalty of Rs 100 per day for each day the default continues, for each certificate, under Section 272A(2)(g) of the Income-tax Act, 1961. The penalty is capped at the amount of tax that was deductible. The “per certificate” point is what stings: an employer with 200 employees who is 20 days late is not looking at one Rs 2,000 exposure but at a default running across 200 certificates.
| Scenario | Certificates | Days late | Indicative exposure (before the per-certificate cap) |
|---|---|---|---|
| Small team | 10 | 15 | 10 x 15 x Rs 100 = Rs 15,000 |
| Mid-size employer | 100 | 15 | 100 x 15 x Rs 100 = Rs 1,50,000 |
| Large employer | 500 | 30 | 500 x 30 x Rs 100 = Rs 15,00,000 |
Each certificate’s penalty is separately capped at the tax deductible for that employee, so the headline figures above are an upper-bound illustration rather than a guaranteed charge. Even so, the message is clear: a payroll team that treats 15 June as flexible is creating a five or six figure exposure for the company. Issuing on time is far cheaper than arguing the cap later.
The One Prerequisite Most Teams Forget: Form 24Q Must Be Filed First
Form 16 has two parts. Part A (the TDS summary, with the unique TRACES certificate number) is downloaded from the TRACES portal. Part B (the detailed salary and deduction breakup) is prepared by the employer, ideally from the TRACES template.
Here is the trap: Part A cannot be generated on TRACES unless every Form 24Q for FY 2025-26 has been filed and processed. Form 24Q is the quarterly salary-TDS statement, and all four quarters must be in:
- Q1: April to June 2025
- Q2: July to September 2025
- Q3: October to December 2025
- Q4: January to March 2026 (the Q4 statement was due 31 May 2026)
If your Q4 24Q is still unfiled or is showing defaults on TRACES, you physically cannot download Part A, which means you cannot issue a valid Form 16, which means the 15 June clock is already against you. The first action this week is to confirm all four 24Q statements are filed and processed without short-deduction or challan-mismatch defaults.
FY 2025-26 Form 16: Income-tax Act 1961 or 2025?
This is the question practitioners are asking, and it deserves a precise answer rather than a confident guess. The position, applying the period-aware principle, is this:
- The income and the assessment are 1961 Act. Form 16 certifies tax deducted on FY 2025-26 salary. That income is assessed in AY 2026-27, which is governed by the Income-tax Act, 1961. The CBDT notified the ITR forms for AY 2026-27 under the Income-tax Rules, 1962, confirming that FY 2025-26 returns remain 1961 Act returns.
- The certificate is issued after the new Act commenced. Form 16 is furnished on or before 15 June 2026, by which date the Income-tax Act, 2025 and the Income-tax Rules, 2026 are in force for Tax Year 2026-27 onwards.
Because the certificate is issued during the changeover, you may see commentary urging that Part B section references be restated in the new Act’s numbering. We are not asserting that as settled, because the substantive deductions and the assessment they feed into belong to the 1961 Act period. The safe, audit-proof course for FY 2025-26 is to issue Form 16 in the format the TRACES portal generates. TRACES is the CBDT’s own utility; if the Board intends any transition change to the certificate, it flows through the portal template. Do not hand-edit section numbers on a manually built certificate, because a mismatch between Part A from TRACES and a re-numbered Part B is exactly the kind of inconsistency that invites a query. When in doubt on a specific reference for a borderline case, confirm against the CBDT-prescribed format before issuing.
The 15 June 2026 Cluster: Form 16 Is Not the Only Thing Due
15 June is a busy compliance date. While the payroll team handles Form 16, make sure the rest of the cluster is covered.
| Date | Obligation | Who it hits |
|---|---|---|
| 7 June 2026 | Deposit of TDS / TCS deducted in May 2026 | All deductors |
| 15 June 2026 | Issue Form 16 (salary) for FY 2025-26 | Employers |
| 15 June 2026 | Issue Form 16A (non-salary TDS) for Q4 FY 2025-26 | All deductors of non-salary TDS |
| 15 June 2026 | First advance tax instalment for Tax Year 2026-27 (at least 15 per cent of estimated tax) | Taxpayers liable to advance tax |
The Form 16A point is easy to miss. If your business deducts TDS on rent, professional fees, contractor payments, or interest, the Q4 non-salary certificates in Form 16A are also due by 15 June 2026, downloaded from TRACES after the relevant Q4 statement (Form 26Q and others) is filed.
The Employer Form 16 Checklist for FY 2025-26
- Confirm all four Form 24Q statements for FY 2025-26 are filed and processed on TRACES, with no open short-deduction or challan-mismatch defaults.
- Clear any 24Q defaults first. File correction statements where there is a PAN error, challan mismatch, or short deduction, so Part A reflects the correct figures.
- Download Part A for every employee from TRACES. Part A carries the unique TRACES certificate number that makes the Form 16 valid.
- Prepare Part B with the salary breakup, exemptions, Chapter VI-A deductions, and the tax computation, preferably using the TRACES Part B template for consistency.
- Cover employees who left during the year. Anyone on payroll at any point in FY 2025-26, including leavers, must receive Form 16 by 15 June 2026.
- Sign digitally. A Form 16 signed with a valid Digital Signature Certificate (DSC) is legally valid and is the cleaner route, because the employee can upload it directly to the e-filing portal.
- Issue in the TRACES-generated format and retain proof of issue (email logs or portal acknowledgements) in case the date of issue is ever questioned.
- Diarise the 15 June cluster so Form 16A and the first advance tax instalment are not forgotten in the rush.
Frequently Asked Questions on Form 16 for FY 2025-26
What is the exact last date to issue Form 16 for FY 2025-26?
15 June 2026, under Rule 31(3) of the Income-tax Rules, 1962. The certificate covers salary TDS deducted during FY 2025-26 (1 April 2025 to 31 March 2026).
What happens if an employer issues Form 16 late?
A penalty of Rs 100 per day per certificate applies under Section 272A(2)(g) of the Income-tax Act, 1961, for the period of delay, subject to a cap equal to the tax deductible for that employee. With large headcounts the per-certificate basis makes the exposure significant.
Can an employee file their ITR without Form 16?
Yes. Form 16 is not legally mandatory for the employee to file a return; the data can be reconstructed from salary slips, Form 26AS, and the Annual Information Statement (AIS). But Form 16 is the cleanest source, and the employer is still independently obliged to issue it by 15 June 2026.
We could not download Part A because a Form 24Q quarter was unfiled. Does that excuse the delay?
No. The obligation to file Form 24Q and the obligation to issue Form 16 are both on the deductor. An unfiled 24Q is a self-created block, not a defence. File or correct the 24Q immediately, then issue Form 16.
Should the FY 2025-26 Form 16 quote Income-tax Act 1961 or 2025 sections?
FY 2025-26 income is assessed under the 1961 Act in AY 2026-27, so the substantive position is the 1961 Act. Because the certificate is issued after the 2025 Act commenced, the practical and audit-safe course is to issue in the format TRACES generates rather than manually re-number sections. Confirm any borderline reference against the CBDT-prescribed format before issuing.
The Bottom Line
Form 16 for FY 2025-26 is due on 15 June 2026, and the path to a clean issue runs through Form 24Q. Confirm all four quarters are filed and default-free, download Part A from TRACES, build Part B in the prescribed format, cover your leavers, sign with a DSC, and keep proof of issue. Do the same for Form 16A, and pay the first advance tax instalment while you are in the portal. Thirteen days is enough; the Rs 100-per-day, per-certificate clock is not something to test.
Unsure how the Income-tax Act 2025 changeover affects your payroll TDS and certificates going forward? Talk to an expert and we will map your FY 2025-26 closeout and your first-year-under-the-new-Act TDS calendar. This article is brought to you by Tax Update India. For the related quarterly filing mechanics, see our deep-dive on the Q4 FY 2025-26 TDS statement filing.
Disclaimer: This article is for general information only and does not constitute legal, tax, or professional advice. Deadlines, rule references, and penalty provisions are based on the Income-tax Rules, 1962 and the Income-tax Act, 1961 as applicable to FY 2025-26 (AY 2026-27), and on professional commentaries available as on 2 June 2026. Confirm the current position and the prescribed certificate format on the TRACES and income tax portals for your specific facts before acting. Consult a qualified professional for advice on your situation.
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