Form 16 vs AIS vs Form 26AS: Match Them Like Books Against the Bank

At our rice mill, the books are matched against outside records as a matter of routine, the most basic being the bank statement against the cash book. Two records of the same money rarely agree at first glance. They are kept by different people for different purposes, and the real work is finding out why they differ.

Form 16, the Annual Information Statement (AIS) and Form 26AS are the same problem for anyone filing an income tax return, salaried, freelance or retired. Form 16 says one number, AIS says another, and Form 26AS shows something else again. None of the three is wrong by default: they exist for different reasons and are built from different data. Form 16 is your employer's record of your salary and the tax deducted from it. Form 26AS is a tax-credit statement. AIS is a much wider financial summary compiled from banks, employers, registrars and other reporting entities.

Before filing, compare all three: use Form 26AS to confirm tax credit, AIS to check for additional income, and Form 16 as your salary reference, then reconcile the differences. This guide covers all three together, including how to read Form 16 Part A and Part B and how to download and read Form 26AS and AIS, and it sets out how I'd sort the differences once you find them.

Form 16, AIS and Form 26AS at a Glance

What Is Form 16?

Form 16 is the annual TDS certificate your employer issues after deducting tax from your salary through the year. It certifies how much salary was paid to you during the financial year, how much TDS was deducted from it, and, separately, how much of that TDS has been deposited with the government. It is the employer's official statement of your salary and the taxes already paid on your behalf.

Employers issue it to any employee whose salary was subject to TDS. Under the Income-tax Rules, employers must issue Form 16 by 15 June of the following financial year: for FY 2025-26 that was 15 June 2026, and for FY 2026-27 (tax year 2026-27), when the certificate is renamed Form 130 under the Income-tax Rules, 2026, it falls on 15 June 2027. Confirm the date on the official portal if you're reading this later, since due dates can shift.

Form 16 is not a salary slip. A salary slip shows monthly pay; Form 16 is an annual, employer-certified statement of your total salary, exemptions, deductions and TDS, meant specifically for tax purposes.

If you changed jobs, each employer who deducted TDS should issue a separate Form 16 for your period there. Add the salaries together when filing, since a new employer's payroll often doesn't know your earlier employer's numbers unless you declared them.

If an employer doesn't issue Form 16 (common with short stints, low salaries below the TDS threshold, or administrative delay), you can still file; see Can You File ITR Without Form 16? for what to use instead.

Form 16 Part A

Part A is generated through TRACES and is a factual, system-verified record. It contains:

• Employer's TAN (Tax Deduction and Collection Account Number) and PAN
• Your PAN
• Employer and employee name and address
• The assessment year, and the period of employment with that employer during the financial year
• Total TDS deposited by the employer, with a quarter-wise summary of TDS deducted and deposited
• A certificate/authentication number that lets you verify it was actually downloaded from TRACES

Since Part A draws on the same TDS-return data that feeds Form 26AS, its TDS figures should generally match Form 26AS. If they don't, that's a mismatch worth investigating.

Form 16 Part B

Part B is prepared by the employer directly (not centrally generated) and lays out the salary and tax computation. It follows a standardised format that mirrors the Schedule S (Salary) section in your ITR. Here is what each line means:

• Gross salary: Total of all salary components before any deductions: basic, HRA, special allowance, LTA, bonus, arrears, perquisites, everything.
• Perquisites under Section 17(2): Non-cash benefits provided by the employer, such as a company car, rent-free accommodation, ESOP benefits or club membership. These are valued and added to taxable income.
• Profits in lieu of salary under Section 17(3): Includes joining bonuses received from a new employer, severance payments, or compensation for termination. All taxable.
• Allowances to the extent exempt under Section 10: This is where the exempt portion of HRA, LTA exemption, and other exempt allowances are subtracted.
• Deductions from salary: Such as professional tax.
• Standard deduction: ₹50,000 per year under the old regime; ₹75,000 per year under the new regime. Every salaried employee gets this automatically.
• Net salary: After removing exempt allowances and standard deduction, the portion your employer computed as taxable salary from this employer.
• Deductions under Chapter VI-A: The deductions your employer accounted for, based on the declarations and proofs you submitted: 80C investments, 80D premiums, home loan interest, NPS contribution (80CCD), etc.
• Taxable salary: Net salary minus Chapter VI-A deductions. This is the amount on which your employer computed the tax.
• Tax on total salary, rebate under Section 87A, surcharge and cess: The final tax computation and the TDS deducted, with the Section 87A rebate applied if your taxable income is within the limit (₹5 lakh under the old regime, ₹12 lakh under the new regime), and surcharge where applicable.
• Tax regime: The regime the employer used for calculating your TDS.

Part B is your salary P&L for the year: what went in, what was exempt, what you claimed, and what tax resulted.

It reflects the employer's payroll calculation based on the declarations and proofs you gave them. It is not automatically your final, complete tax position. Income the employer didn't know about (bank interest, capital gains, a second job, rent), or investments that differed from your declaration, can change your real liability. The ITR is where you report your complete picture, not a copy of Form 16.

Perquisites Commonly Seen in Form 16 Part B

Section 17(2) perquisites that commonly appear in Form 16:

• ESOP (Employee Stock Options): When you exercise ESOPs, the difference between the exercise price and the FMV at exercise date is a perquisite. This is added to your salary and taxed at slab rate. The employer must compute this and include it in Form 16 Part B. The perquisite value becomes your cost basis for future capital gains calculation when you sell the shares.
• Rent-free accommodation: If your employer provides housing (rare, but common in some industries), the notional rental value is a taxable perquisite based on government formula.
• Company car for personal use: If you use a company-owned vehicle for personal purposes, the perquisite is valued at ₹1,800–₹3,300/month for FY 2025-26, depending on engine capacity and whether a driver is provided. From tax year 2026-27 the Income-tax Rules, 2026 raise this to ₹5,000–₹10,000/month.
• Meals above ₹50/meal: Employer-subsidised cafeteria meals costing the employer more than ₹50 per meal are taxable perquisites on the excess for FY 2025-26. From tax year 2026-27 the limit is ₹200 per meal.

Understanding what appears in the perquisites section of Form 16 helps you verify that your employer hasn't inadvertently included or excluded items, and that the perquisite valuations are correct.

Section 10(14) Allowances in Form 16

Part B of Form 16 may show various allowances exempted under Section 10(14), a section covering special allowances for expenses incurred in performing duties. Common ones:

• Conveyance allowance and medical reimbursement: the old exemptions (₹19,200 a year for conveyance, ₹15,000 for medical bills) were withdrawn from FY 2018-19, when the standard deduction replaced them, so for most employees these amounts now show up as taxable salary
• Children's education allowance: ₹100/month per child (up to 2 children) = ₹2,400/year maximum for FY 2025-26; ₹3,000/month per child from tax year 2026-27
• Hostel expenditure allowance: ₹300/month per child = ₹7,200/year maximum for FY 2025-26; ₹9,000/month per child from tax year 2026-27

For FY 2025-26 these are small amounts, but verify your Form 16 includes them if your salary structure contains these components; from 2026-27 they are worth a line in your salary structure.

Old Regime vs New Regime in Form 16

From FY 2023-24 onwards, Form 16 Part B indicates which tax regime was used for TDS computation. If your employer computed TDS under the new regime, you will see a box or field noting "New Tax Regime" with the standard deduction of ₹75,000 applied.

If your employer used the old regime (because you opted for it and submitted investment proofs), you will see the full deduction schedule in Part B.

Key implication: If you switch regimes at ITR filing time (for example, your employer deducted TDS under the new regime but you choose the old regime in your ITR), you must recalculate the tax liability under the old regime, account for your deductions, and either claim a refund or pay the difference as self-assessment tax.

Form 26AS and AIS Explained

Between them, Form 26AS and the Annual Information Statement (AIS) tell you exactly what the Income Tax Department already knows about your taxes and financial activity.

What Is Form 26AS?

Form 26AS is a tax credit statement, generated by the Income Tax Department from TDS and TCS returns filed by deductors and collectors, and viewable through the TRACES portal. It consolidates all taxes paid against your PAN from every source; think of it as the department's record of your tax payments. Since AIS was introduced, Form 26AS has narrowed to primarily confirm: TDS deducted by employers, banks and other deductors; TCS, where applicable; advance tax you paid; self-assessment tax paid; and refund information, where processed.

Form 26AS matters because it's what the department checks when verifying the TDS credit you claim in your ITR. If a TDS amount doesn't appear here, claiming it can flag your filing for a mismatch notice, even if Form 16 clearly shows the deduction. A salary figure in Form 16 may not fully match Form 26AS because Form 26AS reflects only what deductors have actually filed and deposited, not what your employer told you they deducted; a delay or error at the employer's end shows up here first.

Form 26AS is organised in parts:

Part A: TDS (Tax Deducted at Source). All TDS deducted and deposited against your PAN. This includes:

• TDS on salary (deducted by employer)
• TDS on interest income from bank FDs
• TDS on rental income received (if your tenant is a company or HUF)
• TDS on professional fees or consulting income
• TDS on EPF withdrawal (if applicable)
• TDS on dividend (if dividend from a company exceeds ₹10,000 in the year)

Part B: TCS (Tax Collected at Source). Tax collected by sellers on certain purchases, for example TCS on purchase of a vehicle above ₹10 lakh, or TCS collected on foreign remittances under LRS.

Part C: Tax Paid by Assessee. Self-assessment tax and advance tax payments you've made directly via Challan 280.

Part D: Refund Issued. Any income tax refunds issued to you in the selected year, with the assessment year they relate to.

Part F: TDS on Sale of Immovable Property. If you've bought immovable property and deducted TDS under Section 194-IA before paying the seller, this appears here. The buyer's side of that deduction is covered in TDS on property purchase.

Form 26AS differs from AIS in one key way: it doesn't carry AIS's broader financial-transaction data, and unlike AIS, you can't submit feedback directly on a Form 26AS entry. Corrections have to go through the deductor's TDS return.

What Is the Annual Information Statement?

The Annual Information Statement (AIS), launched by the Income Tax Department in 2021, is the department's broader financial information statement, built from data reported by employers, banks, registrars, brokers, mutual fund houses and other institutions. While Form 26AS focuses primarily on taxes paid, AIS tracks your financial activity across the economy as reported by multiple agencies, not just your employer and your bank. Per the official AIS page, its purpose is to show the taxpayer a full view of information before filing, support easier return pre-filling, and discourage under-reporting.

AIS has two parts: Part A carries basic taxpayer details (PAN, name, contact information); Part B carries the transaction-level data: TDS/TCS information, financial transactions reported under the Statement of Financial Transactions (SFT) framework, tax payments, and demand/refund details.

Who reports data to AIS:

• Banks (account interest, FD interest, savings interest)
• Mutual fund houses (purchases and redemptions)
• Registrars and Sub-Registrars (property transactions)
• Stock exchanges (equity purchases and sales)
• Depository participants (CDSL, NSDL: securities transactions)
• SEBI-registered entities
• Insurance companies (premiums paid above thresholds)
• Foreign Remittance companies (LRS transactions)
• Post offices
• RBI (government securities)

Categories commonly seen in AIS include salary, savings account and fixed deposit interest, dividend income, securities and mutual fund transactions, capital gains-related information, property purchase or sale, rent received, foreign remittances, TDS/TCS, GST turnover or other business information where applicable, and other reported financial transactions.

The Income Tax Department wants you to reconcile the AIS before filing. If AIS shows income that you haven't declared in your ITR, the system will raise discrepancies. If your return matches AIS, ITR processing tends to be smoother.

An AIS entry does not automatically mean the full amount shown is taxable, or entirely yours to report as-is. The department's own AIS documentation states AIS reflects information "presently available" and may not capture every transaction, so treat it as a strong starting checklist, not a final verdict. A few clarifications worth internalising:

• Gross value, not gain: some entries show the gross transaction value rather than income or gain; a property sale may show the full sale consideration, not your capital gain after cost of acquisition.
• Duplicates happen when more than one reporting entity submits overlapping information about the same transaction.
• Joint transactions (a jointly held account, property, or demat holding) can appear at the full value against each holder's PAN, though only a share actually belongs to each person.
• Securities sale value ≠ capital gains. AIS may show what you sold shares or units for; your taxable gain is that value minus your cost of acquisition (and, for equities, applicable holding-period rules), a calculation you still do yourself, using your broker or mutual fund statement. See the Capital Gains Tax Guide for how that calculation actually works.

AIS is a research tool for catching income you might otherwise miss reporting, not a pre-computed final tax figure to copy over.

How to Download Form 26AS and AIS

Both are accessed through the Income Tax e-filing portal (incometax.gov.in).

For Form 26AS:

1. Log in to incometax.gov.in
2. Under 'My Account' or 'e-File', navigate to 'View Form 26AS'
3. Redirects to TRACES (TDS Reconciliation Analysis and Correction Enabling System)
4. Download as PDF or view online by Assessment Year

For AIS:

1. Log in to incometax.gov.in
2. Go to 'Annual Information Statement (AIS)' under the 'Services' menu
3. Download or view the AIS; it's available as a PDF and in JSON format
4. The TIS is available on the same page

The AIS Sections That Matter Most

AIS is organised in tabs. The sections that require the most attention:

Salary: Should match Form 16 Part A from your employer(s). Cross-check against each employer's Form 16. If you changed jobs, both employers should appear.

Interest income: This is where most surprises occur. AIS aggregates interest from all banks and financial institutions. You may have forgotten a dormant FD, an RD at a bank you don't actively use, or PPF/NSC interest (which is tax-exempt but still reported). Note: PPF interest is tax-free under EEE but the amount may still appear in AIS as informational.

Dividends: If you hold mutual funds in dividend option or individual company shares, dividends received appear here. Dividends are taxable at slab rate (since FY 2020-21). TDS at 10% is deducted if total dividend from a company, or income from mutual fund units, exceeds ₹10,000 in the year; the Sections 194 and 194K thresholds were both raised from ₹5,000 to ₹10,000 with effect from 1 April 2025.

Mutual fund transactions: Purchases and redemptions at AMC level: amounts, dates, and fund names. Use the CAMS/KFintech consolidated capital gains statement for actual gains; the AIS figures are for transaction amount, not gain.

Property transactions: Any property registered in your name appears here. Sale/purchase prices are the registered consideration. If you sold property during the year, the consideration must be disclosed in Schedule CG even if it's a long-term exempt gain (Section 54).

GST turnover: If you are GST-registered, your aggregate GST turnover filed through GSTN flows to AIS. Income tax scrutiny uses GST turnover to cross-check income declared in ITR. A freelancer showing ₹30 lakh GST turnover but ₹12 lakh income in ITR creates an obvious mismatch that will be questioned. A business should run that comparison on itself first, setting what its GST filings say it sold beside what its books and ITR show, before anyone else runs it for you.

AIS vs TIS

The Taxpayer Information Summary (TIS) is a simplified, aggregated version of AIS. Instead of showing every individual reported transaction, TIS groups them by category and shows both the "reported value" (as received from the source) and a "processed value" the system derives after applying basic de-duplication logic.

TIS is the version used to pre-fill values into your ITR where pre-filling is supported. In short: AIS is the detailed transaction list; TIS is the summarised, category-wise version built on top of it. You don't need to treat them as two separate mismatch problems. Check AIS for the transaction-level detail, and treat TIS as the "what the system currently thinks your total is" summary for each category.

If TIS shows incorrect aggregates (because of wrong individual transactions in AIS), submit AIS feedback first before filing. However, even if AIS/TIS shows a higher figure (due to errors), you should file with the correct lower figure from your own records, and explain the discrepancy in AIS feedback. The IT system processes returns based on your declarations, not AIS automatically.

Form 16 vs AIS vs Form 26AS Comparison

Form 26AS and AIS contain overlapping but not identical data. The most common divergences:

• TDS on salary in Form 26AS: Based on quarterly TDS returns (Form 24Q) filed by your employer. Shows the tax deposited, not the salary paid.
• Salary in AIS: The salary amount as reported by the employer, which may differ from the Form 16 amount if the employer reported it differently.
• Interest in Form 26AS: TDS deducted on interest (Part A). It only shows TDS, not gross interest unless TDS was deducted.
• Interest in AIS: Gross interest credited to accounts, reported by banks, including interest amounts where no TDS was deducted.

This is why both documents must be reviewed. Form 26AS verifies tax credits; AIS verifies income. Using only Form 26AS misses income where no TDS was deducted. Using only AIS misses the TDS credit verification that Form 26AS provides.

Why Form 16, AIS and Form 26AS May Not Match

• Employer filed the TDS return late: the quarterly return hasn't been processed yet, so Form 16's TDS hasn't reached Form 26AS.
• Employer entered the wrong PAN: the credit attaches to a different PAN and never shows up in your Form 26AS, even though tax was actually deducted.
• TDS was deducted but not deposited: less common, but it happens.
• A corrected TDS return is still processing: fixes (like a PAN correction) take time to reflect.
• Salary from a previous employer is missing: your latest employer's Form 16 usually excludes it unless you declared it.
• AIS shows bank interest not in Form 16: expected; Form 16 is a salary-only document.
• Dividend income is missing from payroll records: dividends have nothing to do with your employer.
• AIS shows duplicate transactions: more than one reporting entity submitted overlapping data.
• A mutual fund or share sale value is confused with the taxable gain: AIS often shows the gross sale value, not your gain.
• A joint property transaction is reported in full against each co-owner's PAN.
• Income belongs to a different financial year: a transaction near year-end, or reported with a lag, can look misplaced.
• You changed jobs mid-year, and each employer's TDS filing reflects only their portion of your salary.
• The employer considered a deduction that turned out ineligible, for example an 80C investment declared but not actually made.
• You invested after submitting your declaration, so payroll's TDS calculation is based on stale assumptions.
• You're checking the wrong assessment year. An AY 2026-27 return covers FY 2025-26, so pulling in documents for FY 2026-27 (the year you're earning in now) or for an earlier year is a common, avoidable error.
• A refund or tax payment hasn't updated yet in the system.
• Data reported by a bank, broker, employer or registrar is simply wrong at source, which is exactly what AIS feedback exists to address.

Why I Treat a Mismatch Like a Bank Reconciliation

That list looks long, but it sorts into three kinds of difference, and they are the same three a bank statement reconciliation turns up in any business, ours included. Reconciliation is the habit behind the mill's cash credit account and every figure we give the bank.

Timing. In a bank reconciliation, most differences are a cheque written but not yet cleared, or a deposit made on the last day of the month. Nothing is wrong; one record is simply ahead of the other. A TDS return not yet processed, a PAN correction still working through TRACES, or a refund not yet updated is the same kind of difference. The fix is a follow-up and a little patience, and you note the gap rather than force the numbers to agree.

Presentation. Some differences are not errors at all, just two records measuring different things. A bank statement may show one deposit where the books record three customers' payments separately: the total agrees, the lines don't. AIS shows the gross sale value of shares where your return needs the gain, and a joint property at full value where you report your share. You don't correct these. You explain them, and the explanation goes into your working file.

Errors. A wrong PAN, TDS deducted but not deposited, a duplicate entry, a deduction your employer assumed that you never made. These are real, and they get fixed at source, by whoever made them: the employer, the deductor, the reporting entity, or you.

What I'd never do is the one thing that makes reconciliation pointless: change my own figure to match the other record without knowing why they differ. The reason for a difference is the whole value of the exercise. Write it down next to the figure, keep the proof, and file on your own reconciled numbers. The routine below is how to get there.

How to Match Form 16, AIS and Form 26AS Before Filing ITR

The Income Tax Department has invested heavily in data analytics. When your ITR is processed, an algorithm compares it against Form 26AS and AIS. Significant discrepancies (unreported interest income, capital gains that don't appear, rental income missing) trigger automated or manual scrutiny.

The notice is not immediate, but under the "faceless assessment" system, notices can come months or years later. For AY 2026-27 and earlier years (still governed by the Income-tax Act, 1961), a reassessment notice generally cannot be issued more than 3 years and 3 months after the end of the assessment year, or 5 years and 3 months if the escaped income is ₹50 lakh or more; for tax year 2026-27 onward, the Income-tax Act, 2025 allows 4 years and 3 months, or 6 years and 3 months, from the end of the tax year. Taking 60–90 minutes before filing to reconcile Form 26AS and AIS with your own records is the most cost-effective tax work you can do each year.

1. Confirm PAN, name and assessment year. Check that Form 16, Form 26AS and AIS are all for the same PAN and AY 2026-27. Mismatched years is the most common self-inflicted error.
2. Add income from all employers. List every Form 16 you received and add the salaries together first.
3. Match salary and TDS. Compare the combined total from Form 16 against AIS and Form 26AS; use bank credits as a cross-check if numbers look off. Then check all other TDS entries in Form 26AS:
   • Bank FD interest: does the TDS match your FD records?
   • Professional income or freelancing: have all clients deducted TDS correctly?
   • Rent: if you received rental income and the tenant (company) deducted TDS, confirm it's there.
4. Check savings and fixed deposit interest. Cross-verify AIS against your passbook or interest certificates; this rarely appears in Form 16.
5. Check dividend income. Compare AIS entries against demat/broker statements, mutual fund statements or dividend advice.
6. Review share and mutual fund transactions. Match share trades to your broker's tax P&L statement and mutual fund entries to your fund statements or platform reports, then pull capital gains statements and calculate actual gains; don't use the AIS transaction value directly.
7. Check property-related information. If you sold or bought property this year, it should appear in AIS; verify it against your sale deed, confirming your actual share if jointly owned.
8. Verify advance tax and self-assessment tax. Match challan receipts against Form 26AS and AIS.
9. Check deductions and exemptions. Confirm the Chapter VI-A deductions Form 16 assumed actually match proofs you hold, not just your initial declaration. Did you submit all declarations (80C investments, home loan certificate, rent receipts) to your employer? Part B should reflect them. If any deductions are missing from Part B, you can still claim them directly in your ITR: the deduction is your right, not contingent on employer declaration (see the worked example).
10. Reconcile the final taxable income. Compute your total yourself, or via a computation sheet, rather than trusting any single document. Part B shows the tax computed by your employer; cross-check it against your own calculation. Discrepancies can arise from different computation of HRA exemption, or deductions your employer missed.
11. Save supporting records: salary slips, bank statements, interest certificates, broker statements, challans, and Form 16 from every employer.
12. File only after reviewing pre-filled details. The ITR utility often pre-fills from AIS/TIS and Form 26AS; check every figure against your own reconciliation before submitting. From Part B, ITR-1 (or ITR-2 for multiple income sources) requires you to enter gross salary, exempt allowances (HRA, LTA etc.), the standard deduction amount and net salary after deductions. Our step-by-step guide to filing your ITR online covers this process end to end.

What Pre-Filled ITR Data Means and Its Limitations

Since FY 2021-22, the IT Department pre-fills ITR with data from Form 26AS, AIS, and other sources. When you start filing on the portal, many fields appear populated:

• Salary income (from Form 26AS TDS data)
• Interest income (from AIS bank reports)
• Dividend income (from AIS)
• TDS credits (from Form 26AS)

Limitations of pre-fill:

• Salary figure may be gross CTC without HRA or other exemptions applied
• Interest may include exempt components (PPF interest) that you need to remove
• Capital gains figures are not pre-filled (amounts in AIS are transaction amounts, not gains)
• Deductions (80C, 80D, HRA) are never pre-filled; you enter these yourself

Always treat the pre-filled return as a starting point, not a final return.

Advance Tax When Form 16 TDS Isn't Enough

If you have income beyond your salary (freelancing, rental income, capital gains), your Form 16 TDS may not be sufficient to cover total annual tax liability. In such cases:

• Advance tax should have been paid in four instalments: June 15 (15%), September 15 (45%), December 15 (75%), March 15 (100%)
• Any shortfall (total tax liability minus TDS from Form 16 minus advance tax paid) becomes self-assessment tax, payable before filing ITR
• Interest under Section 234B applies on shortfall from April 1 if total advance tax paid was less than 90% of total liability

Practical Reconciliation Table

What to Do If Form 16 Is Incorrect

• Wrong PAN: ask the employer for a corrected Form 16 and a corrected TDS return; a wrong PAN means the credit may never reach Form 26AS.
• Incorrect salary amount: request a corrected Form 16 from HR/payroll; use salary slips as the accurate reference meanwhile.
• Incorrect deductions: calculate your own correct figure for the ITR; you're not bound to copy the employer's assumption. If Part B misses deductions you submitted proofs for, you can still claim them, but keep documentation ready in case of scrutiny.
• TDS mismatch: check Form 26AS first; if the TDS is truly not reflected, resolve it with the deductor before relying on it. If your employer deducted TDS but didn't deposit it or filed incorrect details, that is an employer failure, not your liability to pay again.
• Previous employer income missing: add it yourself using the earlier Form 16.
• Wrong tax regime assumption: employers pick a default regime for TDS purposes, but you can choose differently when filing your ITR; see Old Tax Regime vs New Tax Regime to check which applies to you.
• Incorrect exemption calculation: recompute exemptions (like HRA) yourself using your actual rent and salary structure; the HRA exemption calculator can help.

The underlying principle: your ITR must reflect your correct income and tax position. Form 16 is a reference, not something to copy verbatim if you know it's wrong. If a figure on your Form 16 looks wrong, raise it with payroll first, and if it still doesn't reconcile, a CA can confirm whether the discrepancy affects your filing.

Worked Example: Claiming a Deduction Missing From Form 16

Scenario: a salaried employee in Bengaluru. Her Form 16 shows:

• Gross salary: ₹14,00,000
• HRA received: ₹3,60,000; HRA exempt (calculated by employer): ₹1,80,000
• Standard deduction: ₹50,000
• Net salary: ₹11,70,000
• 80C declared to employer: ₹1,50,000
• 80D declared: ₹25,000
• Taxable income per employer: ₹9,95,000
• TDS deducted: ₹1,15,960 (old-regime tax on ₹9,95,000: ₹12,500 + ₹99,000 = ₹1,11,500, plus 4% cess)

Now she realises she also contributed ₹50,000 to NPS under 80CCD(1B), which she forgot to declare to her employer. She can still claim this deduction in her ITR.

Her ITR computation:

• Taxable income per Form 16: ₹9,95,000
• Less 80CCD(1B) not declared to employer: ₹50,000
• Revised taxable income: ₹9,45,000
• Tax on ₹9,45,000 (old regime): ₹2.5–5L at 5% = ₹12,500; ₹5–9.45L at 20% = ₹89,000; total ₹1,01,500 + 4% cess = ₹1,05,560
• TDS already deducted: ₹1,15,960
• Refund due: ₹1,15,960 − ₹1,05,560 = ₹10,400

The refund is exactly what the forgotten deduction is worth: ₹50,000 claimed against her 20% slab, plus 4% cess, so ₹50,000 × 20% × 1.04 = ₹10,400. That is the general rule for any deduction you add at filing time that your employer never saw: its value is the deduction multiplied by your marginal slab rate and the cess, not some separate number.

The Cost of Not Declaring Deductions to Your Employer

Consider two employees each earning ₹12 lakh gross salary under the old regime. Employee A correctly declares all deductions via Form 16; Employee B doesn't submit proofs.

Employee B will get a refund when filing ITR (assuming they claim the deductions then), but has parted with ₹76,960 in TDS unnecessarily throughout the year. That's money that could have been invested for several months. At the mill, the cash credit charges interest on the daily balance, which makes one thing plain: money tied up for months is never free, even when all of it comes back.