Form 16 becomes Form 130: what changes under the new Income Tax Act, 2025

If you’re filing your return for FY 2025-26 (AY 2026-27) this July, nothing changes — your employer still issues Form 16, the same two-part TDS certificate salaried taxpayers have used for decades. But from next year’s filing season onward, that document has a new name and a new shape: Form 130, issued under the Income Tax Act, 2025.

Why the form is changing at all

The Income Tax Act, 2025 came into force on 1 April 2026, formally repealing the Income Tax Act, 1961, per the Central Board of Direct Taxes’ own press release. The new Act consolidates six decades of amendments, provisos and cross-references into a cleaner code — and one visible side effect is that provisions once tied to Section 192 (TDS on salary) now sit under Section 392 of the new Act, with the certificate itself notified under Section 395, read with Rule 215 of the Income Tax Rules, 2026.

Two structural changes matter for individual taxpayers:

• “Previous Year” and “Assessment Year” are gone. The new Act replaces both with a single “Tax Year” — the year in which income is earned is the year it’s assessed, with no more previous-year/assessment-year offset to keep track of.
• Form 16 is renamed Form 130, and it gets an extra section.

When you’ll actually see Form 130

Because the transition rule ties the applicable law to when income is paid or credited, the switch isn’t instant:

Tax year of income	Governing law	Certificate issued
FY 2025-26 (income earned before 1 April 2026)	Income Tax Act, 1961	Form 16 (this year’s filing season)
Tax Year 2026-27 (income earned from 1 April 2026)	Income Tax Act, 2025	Form 130 (next year’s filing season)

So the Form 16 you’re collecting right now to file by 31 July 2026 is unaffected. Form 130 will only land in employees’ inboxes when employers close out TDS for the year starting April 2026 — i.e., in the 2027 filing season.

What’s different inside Form 130

	Form 16	Form 130
Structure	Part A + Part B	Part A + Part B + Part C (two annexures)
Employment period field	Not present	New mandatory field in Part A
Detailed tax computation	Embedded in Part B	Moved to Annexure I of Part C
Senior-citizen pension/interest reporting	Not separated out	New Annexure II for specified senior citizens (pension + “other sources” interest reported by banks)
Legal basis	Section 192, IT Act 1961	Section 392/395, IT Act 2025

The core purpose is unchanged — it still certifies your salary, deductions and TDS deposited by the employer. The added annexures mainly pull the full tax computation (gross salary, exemptions, deductions, tax payable) into one place instead of leaving you to reconstruct it, and give senior citizens a dedicated section for pension and bank-reported interest income.

What to actually do right now

1. Nothing changes for this year’s ITR. Use your Form 16 as usual and file by 31 July 2026 (or the applicable staggered deadline for your ITR form).
2. Don’t confuse “Tax Year” with the current AY/PY system when you read next year’s forms — Tax Year 2026-27 is the equivalent of what would have been FY 2026-27 income, assessed in the same cycle rather than the year after.
3. Expect Form 130, not Form 16, only from your employer’s next TDS cycle — if an employer or portal mentions Form 130 for FY 2025-26 income, that’s likely an error, since transition rules keep that year under the old Act and old form.

Run your numbers for the current filing season with the income tax calculator and check whether the old regime still beats the new one for your deduction mix before the 31 July deadline.

Sources: Income Tax Department — press release, Income Tax Act 2025 comes into force from 1 April 2026, PIB — Income Tax Act, 2025 to come into effect from 1st April 2026, ClearTax — Form 130, new salary TDS certificate under Income Tax Act 2025, Business Today — what is Form 130, the successor to Form 16.