Daijiworld Media Network - New Delhi

New Delhi, Mar 25: The widely used Form 16 will be replaced by Form 130 under the new Income Tax Act, 2025, which comes into effect from April 1, marking a major overhaul in tax documentation.

Form 16, issued annually by employers, serves as a Tax Deducted at Source (TDS) certificate for salary income, detailing earnings, tax deductions, and applicable exemptions. It will continue to be issued by June 15 of the financial year following the relevant tax year, but under a new numbering system.

Similarly, Form 16A—used for non-salary income such as rent, interest, and professional fees—will be renamed as Form 131. It must be issued within 15 days of filing the corresponding quarterly TDS statements.

Other key changes include renaming Form 26AS to Form 168 and quarterly TDS returns (currently Form 24Q) to Form 138, as part of a broader rationalisation of forms.

Tax experts said the renumbering will not impact functionality but is aimed at simplifying compliance and aligning forms with provisions under the new Act. Tarun Garg of Deloitte India said the move will remove duplication and create a more structured system linked to statutory provisions.

Many forms are also expected to include pre-filled data using government records, easing the filing process for taxpayers.

In another key change, the Tax Residency Certificate application, currently Form 10F, will be renamed Form 42. This document is essential for claiming benefits under Double Taxation Avoidance Agreements (DTAA), and taxpayers will need to file Form 42 to obtain the certificate (Form 43). Aadhaar will no longer be mandatory for this application, though PAN will remain essential.

The new law replaces the existing Income Tax Act of 1961. While tax rates remain unchanged, the revamped framework introduces procedural reforms aimed at reducing compliance burden and modernising the tax system.