Build Form 16 Part B from Payroll Data

Skill: Convert annual payroll and investment-proof data into Form 16 Part B figures

Region: India Category: Income Tax — Form 16 Part B (salary TDS certificate) Does: Takes a year's payroll and investment-proof data and produces the Form 16 Part B line-item figures (JSON) — gross salary, section 10 exemptions, deductions, regime-specific tax, and the TDS reconciliation that ties to Form 24Q Annexure II. Standard: Form 16 Part B (Rule 31, Income-tax Act); Part A is generated from TRACES.

The AI computes the Part B figures from the data you supply; Part A (with the TRACES digital signature and quarterly TDS receipts) must be downloaded from the TRACES portal — the AI does not produce it. Confirm the applicable assessment year's slabs, the default regime (new regime u/s 115BAC is default unless old is opted), and current limits before issuing.

When this applies

• An employer (deductor) prepares the annual salary TDS certificate (Form 16) for an employee for a financial year.
• Use for the Part B computation; reconcile the TDS deducted/deposited against Form 24Q Annexure II.
• Choose old vs new regime per the employee's declaration; the new regime is the default.

Conversion procedure

1. Read the source. Accept payroll CSV/JSON (monthly salary heads), the investment-proof/declaration, and the regime choice. Identify employer TAN, employee PAN, and the financial/assessment year.
2. Extract fields. Salary u/s 17(1), perquisites u/s 17(2), profits in lieu u/s 17(3), exempt allowances u/s 10 (HRA, LTA, etc.), and Chapter VI-A investment data. If PAN, TAN, gross salary, or TDS deposited is missing, stop and ask.
3. Normalize. Amounts in whole rupees. Dates DD-MMM-YYYY or YYYY-MM-DD consistently.
4. Compute per regime: gross salary → exemptions → standard deduction → income under "Salaries" → Chapter VI-A (old regime) → total income → tax on slabs → rebate 87A → cess; then reconcile to TDS.
5. Emit the JSON Part B dataset.
6. Validate with the checklist and against 24Q.

Source → Form 16 Part B field map

Document structure

form16_part_b
├── deductor (TAN, name) / employee (PAN, name)
├── financial_year / assessment_year / regime
├── salary_17_1 / perquisites_17_2 / profits_17_3 / gross_salary
├── exemptions_section_10[]
├── standard_deduction
├── income_under_salaries
├── chapter_via[]            (old regime only)
├── total_income
├── tax_on_income / rebate_87a / cess / total_tax_payable
└── tds_deducted             (reconciles to 24Q Annexure II)

Code tables

Section 10 exemptions (selected)

Chapter VI-A deductions (old regime)

Regime

Calculation rules

• Gross salary = salary_17_1 + perquisites_17_2 + profits_17_3.
• Income under Salaries = gross salary − Σ section 10 exemptions − standard deduction.
• Old regime total income = income under salaries − Σ Chapter VI-A (each capped at its limit); new regime disallows most of these.
• Tax = slab tax on total income for the chosen regime; apply rebate 87A if total income ≤ the threshold; cess = 4% of (tax − rebate).
• TDS reconciliation: tds_deducted must equal the sum of quarterly TDS in Form 24Q Annexure II; flag any difference.
• Recompute all totals; never copy a printed figure.

Worked example (end-to-end)

Input — annual payroll (new regime)

Deductor TAN: BLRA12345B, Employer: Acme India Pvt Ltd
Employee PAN: ABCPK1234L, FY 2025-26 (AY 2026-27), regime: new
Gross salary (17(1)): 12,00,000 ; perquisites: 0
Standard deduction: 75,000 (new regime)
TDS deposited (24Q): as computed

After computation (intermediate, new regime)

gross_salary = 1200000
income_under_salaries = 1200000 - 75000 = 1125000
total_income = 1125000
tax (new-regime slabs, illustrative) = 64500 ; rebate 87A = 0 ; cess 4% = 2580
total_tax_payable = 67080

Output — Form 16 Part B dataset

{
  "deductor": { "tan": "BLRA12345B", "name": "Acme India Pvt Ltd" },
  "employee": { "pan": "ABCPK1234L", "name": "R. Kumar" },
  "financial_year": "2025-26",
  "assessment_year": "2026-27",
  "regime": "new",
  "salary_17_1": 1200000,
  "perquisites_17_2": 0,
  "profits_17_3": 0,
  "gross_salary": 1200000,
  "exemptions_section_10": [],
  "standard_deduction": 75000,
  "income_under_salaries": 1125000,
  "chapter_via": [],
  "total_income": 1125000,
  "tax_on_income": 64500,
  "rebate_87a": 0,
  "cess": 2580,
  "total_tax_payable": 67080,
  "tds_deducted": 67080
}

Normalisations shown: gross salary summed 1200000 + 0 + 0; new-regime standard deduction 75000 applied; income under salaries 1200000 − 75000 = 1125000; cess 4% × 64500 = 2580; total tax 64500 + 2580 = 67080; tds_deducted reconciled to 24Q. (Slab tax is illustrative — recompute against the AY 2026-27 slabs.)

Validation checklist

• TAN, PAN, FY/AY, and regime captured; AI asked about anything missing (nothing invented)
• Gross salary = 17(1) + 17(2) + 17(3)
• Section 10 exemptions and standard deduction applied per the chosen regime
• Chapter VI-A applied only under the old regime, each within its statutory limit
• Tax computed on the correct AY slabs; rebate 87A applied if eligible; cess = 4%
• tds_deducted reconciles to Form 24Q Annexure II; difference flagged
• Part A (TRACES) obtained separately and attached before issuing

Last updated: 2026-06-13 — verify the assessment year's tax slabs, default-regime rules (115BAC), standard deduction, rebate 87A threshold, and Chapter VI-A limits before use.