Form 130 under the Income Tax Act for Salary TDS Certificate

Introduction

Form 130 under the Income Tax Act is the new TDS certificate for salary, pension, and specified senior citizen interest income. It replaces Form 16 from Tax Year 2026-27. It is issued by the employer and contains quarter-wise details of tax deducted at source (TDS), salary breakup, deductions, and tax deposited.

Under Section 395(4)(b) of the Income Tax Act, 2025, read with Rule 215(1) of the Income Tax Rules, 2026, Form 130 applies from Tax Year 2026-27. For FY 2025-26, employees will continue to receive Form 16. Form 130 applies from Tax Year 2026-27 onwards.

In this blog, we will cover what Form 130 is, how Form 130 replaces Form 16, the difference between Form 130 vs Form 16, and how to download Form 130.

What is Form 130 under the Income Tax Act?

Form 130 under the Income Tax Act is an annual certificate for Tax Deducted at Source (TDS), issued by the employer to a salaried employee or pensioner after the end of the tax year. It contains a detailed summary of salary earned, tax deducted and deposited, and applicable deductions.

This certificate serves as proof that tax has been deducted from salary income and deposited with the Government. It also enables the deductee to claim credit of TDS deducted and deposited on their behalf while filing the Income Tax Return.

Form 130 also applies to interest income earned by specified senior citizens as per Section 402(39) of the Income Tax Act, 2025.

Therefore, Form 130 under the Income Tax Act replaces Form 16, which was earlier issued under Section 203 of the Income Tax Act, 1961, read with Rule 31 of the Income Tax Rules, 1962.

Form 130 vs Form 16 : Key Differences

Structure of Form 130 under the Income Tax Act

Form 130 under the Income Tax Act has three parts, namely Part A, Part B and Part C. Each part covers different details related to the deductor, deductee, income paid or credited, tax deducted at source, and taxable income computation.

Part A: Employer, Bank and Deductee Details

Usually, Part A contains the details of the employer or specified bank and the details of the employee or specified senior citizen to whom Form 130 is issued.

Part B: TDS Reconciliation Details

Here, Part B contains a summary-level reconciliation of the amount paid or credited and the tax deducted at source. It helps show how much income was paid and how much TDS was deducted.

Part C: Income Computation and Annexures

In Part C has two annexures, Annexure-I and Annexure-II.

Annexure-I applies where tax is deducted from salary income of employees under Section 392. It includes break-up of gross salary, exemptions, deductions, total taxable income, tax payable, relief under Section 157, TDS/TCS paid, and net tax payable.

Annexure-II applies to specified senior citizens where tax is deducted under Section 393(1), Table Sl. No. 8(iii). It includes pension income, interest income under the head “Other Sources”, deductions, total taxable income, tax payable, relief under Section 157, and net tax payable.

Form 130 is also part of the new TDS and TCS forms introduced under the Income Tax Act, 2025 to update tax deduction reporting and certificate issuance.

Who Should Issue Form 130?

Form 130 must be issued by the employer or specified bank responsible for deducting tax under the applicable provisions.

In case of salary income, the employer responsible for deducting tax under Section 392 is required to issue Form 130 to the employee.

In case of pension or interest income of a specified senior citizen, the specified bank responsible for deducting tax under Section 393(1), Table Sl. No. 8(iii), is required to issue Form 130 under the Income Tax Act.

How to Download Form 130 under the Income Tax Act?

• Form 130 must be downloaded by the employer or specified bank from the TRACES website.
• It can be generated only after the relevant quarterly TDS statement in Form 138 and supporting annexures are filed and processed.
• Form 130 cannot be issued through any offline or separate process.
• After downloading Form 130, the employer or specified bank must sign it digitally or manually.
• The signed Form 130 must then be provided to the employee, pensioner, or specified senior citizen, as applicable.
• Any certificate prepared through any other mode or process will not be treated as a valid Form 130.

Due Date and Correction Process for Form 130

Employers, businesses, and deductors should also follow the TDS and TCS compliance calendar FY 2026-27 to track return filing due dates, certificate issuance timelines, and other important TDS compliance requirements.

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Conclusion

Form 130 under the Income Tax Act is an important TDS certificate for salaried employees, pensioners, and specified senior citizens earning eligible interest income. It replaces the earlier Form 16 from Tax Year 2026-27 and provides details of income earned, tax deducted, tax deposited, deductions, and taxable income. Since Form 130 can be generated only after the relevant TDS statements are filed and processed, employers and specified banks must ensure accurate and timely TDS compliance. Employees should also preserve Form 130 for claiming TDS credit and for future income tax records.

Frequently Asked Questions