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Income Tax Return 2025: Form 16 summarises salary income and TDS but excludes other incomes like interest, freelancing, capital gains, rental income, or extra deductions.
The deadline to file ITR for salaried individuals is September 15, 2025.
Form 16 & ITR Filing 2025: It’s June 18. You must have received Form 16 from your employer to file the income tax return (ITR) for the assessment year 2025-26 (FY 2024-25). It neatly summarises your salary income, the tax deducted at source (TDS) by your employer, and the deductions you declared through them. However, is it sufficient to file the ITR? The answer is ‘No’. Here’s why, and what all you need to refer to before filing your ITR this year.
What Is Form 16, and What It Doesn’t Tell You?
Form 16 is like a report card from your employer about your salary. It doesn’t account for any financial activity outside that employer-employee relationship. Failing to report additional income or claim eligible deductions not processed via your salary can result in underpaying tax (inviting penalties and interest) or overpaying (leaving your hard-earned money with the IT department).
Here’s What Form 16 Does Not Tell You:
1. Income From Other Sources:
Interest Income: Form 16 does not show interest you earned from fixed deposits (FDs), savings accounts (above the exempt limit of Rs 10,000, and Rs 50,000 for seniors), recurring deposits (RDs), or bonds. Banks deduct TDS (usually 10%) if interest exceeds Rs 40,000 (Rs 50,000 for seniors), but you must report all interest income, even below TDS thresholds.
Also Read: How To File ITR 2025? A Step-By-Step Guide For Online, Offline Income Tax Return Filing For AY26
Freelancing/Gig Work: Did you take on consulting projects, freelance writing, design gigs, or drive for a ride-sharing app outside your regular job? This income is taxable and completely absent from Form 16.
Other Incomes: Lottery winnings, taxable gifts, and family pension fall under ‘Income from Other Sources’ and need separate reporting.
2. Capital Gains (Stocks, Crypto, Property, Mutual Funds)
Stock Market Profits: Sold shares (listed or unlisted) and made a profit? Short-term or long-term capital gains tax applies. Your Form 16 is oblivious to your trading activities.
Crypto Gains/Losses: Income from Virtual Digital Assets (VDAs) like cryptocurrencies or NFTs is taxable. These gains (or losses to set off) are never part of your Form 16.
Property/Mutual Funds: Profits from selling a house, land, or redeeming mutual fund units (especially debt funds or equity funds sold before the qualifying period) generate capital gains you must report separately.
3. Rental Income & Second Home Implications
Rent Received: If you own a property and receive rent, this is taxable income under ‘Income from House Property’. Form 16 doesn’t capture this.
Deemed Rent on Second Home: Own more than one residential property and don’t earn rent from the additional one(s)? The income tax department still considers a ‘Deemed Rental Income’ (based on municipal value, etc.) for the property not designated as your self-occupied one. This tax liability won’t be on Form 16.
4. Deductions You Claimed Directly (Not via Salary):
Health Insurance (Sec 80D): Form 16 only shows deductions you submitted proofs for to your employer. However, it does not show the premiums you paid for yourself, parents (senior or not), or family outside your employer’s payroll deduction system.
Charitable Donations (Sec 80G): Have you made donations to eligible charities or institutions? You can claim deductions, but only if you report them in your ITR. Form 16 will not reflect these.
Education Loan Interest (Sec 80E): Paid interest on an education loan for yourself, spouse, or children? Claim it directly in your ITR; it’s not on Form 16.
Deduction for Disabled Dependent (Sec 80DD/80U) / Medical Treatment (Sec 80DDB): These specific deductions also need to be claimed directly if not processed via salary.
5. Mismatches with AIS/Form 26AS & TDS Errors:
The AIS/26AS Reality Check: Form 16 is your employer’s version of events. However, the record of all reported financial transactions linked to your PAN is your Annual Information Statement (AIS) and Form 26AS. These show:
- TDS deducted by all deductors (banks, clients, tenants, stock brokers etc.), not just your employer.
- Reported high-value transactions (mutual fund purchases/sales, property deals, large deposits etc.).
- Interest income reported by banks.
- Tax payments (advance tax, self-assessment tax).
Form 16 vs. AIS/26AS Mismatch: Your employer might have reported lower TDS in Form 16 than what’s reflected in AIS/26AS, or vice-versa. There could be delays in reporting. Always reconcile Form 16 TDS details with your AIS/26AS.
Deductions Missing in Form 16: Did you submit HRA documents late? Or did your employer overlook some declared deductions? Form 16 might not show them, but you can still claim them in your ITR if eligible, supported by proofs.
How To Make Sure You Have Reported All Your Incomes In ITR?
1. Download Your AIS & Form 26AS: Log in to the Income Tax e-filing portal ( Find and download your AIS (Comprehensive view) and Form 26AS (Tax Credit view) for FY 2024-25 (AY 2025-26).
2. Compare Salary TDS: Match the total TDS amount and the Employer’s TAN (Tax Deduction Account Number) shown in Form 16 Part B with the corresponding entries in your AIS/Form 26AS.
3. Scan for Other Income & TDS: Look carefully at your AIS/Form 26AS for:
- Interest income reported by banks (even if no TDS was deducted).
- TDS deducted by banks on FDs/RDs.
- TDS deducted by clients on freelance payments (if any).
- TDS deducted by tenants on rent (if applicable and above threshold).
- Details of capital gains transactions reported by brokers.
- Details of property purchases/sales.
4. Note Discrepancies: If you find differences between Form 16 and AIS/26AS, or see income/TDS you didn’t account for, investigate. Contact your employer or the relevant deductor (bank, broker, tenant) if necessary to resolve mismatches before filing.
What To Do To Avoid Any Future Income Tax Notice?
Gather All Income Documents: Salary slips, Form 16, bank statements (for interest), capital gains statements from brokers/depositories, rent agreements (if landlord), freelance invoices/payment proofs.
Download & Review AIS/Form 26AS: Treat this as your single source of truth for reported transactions. Reconcile meticulously with Form 16.
Account for All Income: Salary + Interest + Capital Gains + Rent + Freelance + Any other income. Don’t assume Form 16 covers it.
Claim All Eligible Deductions: List deductions claimed via employer and those paid directly (Health Ins, Donations, Loan Interest, etc.). Have proofs ready.
Verify Pre-filled Data: The ITR form pre-fills data from AIS. Scrutinise it. Is it accurate? Complete? Does it match your records?
File on Time: Avoid last-minute rush and potential errors. The deadline for salaried individuals is September 15, 2025.
Employers are mandated to provide Form 16 by June 15. So, if you have not yet received your Form 16, you can download it from your company’s HR portal.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso… Read More
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