Every year, as soon as Form 16 lands in our inboxes, many of us breathe a sigh of relief. After all, it contains our salary details, tax deductions and the calculations prepared by the employer. It feels like the perfect document to simply upload and file the return.
But that assumption can be costly.
I have come across several cases where taxpayers received notices, lost out on deductions or ended up paying additional tax because they overlooked small details hidden in Form 16. A wrong PAN, a mismatch in TDS, income missing from the return, or even choosing the wrong tax regime can create problems later.
So, I spoke to tax experts to understand the common mistakes employees make and the (ITR) for Assessment Year (AY) 2026-27.
Here’s what they had to say.
Many employees treat Form 16 as a single document. It isn’t.
According to Mrinal Mehta, Joint Secretary at Bombay Chartered Accountants’ Society, taxpayers should view Form 16 as two separate documents.
“Part A is the TDS certificate generated from the TRACES portal, while Part B is the annexure prepared by the employer containing salary details and tax computation,” he explained.
In Part A, employees should verify their PAN, the employer’s TAN and whether the TDS shown matches what was deducted from their salary. In Part B, they should check the salary break-up, exemptions, deductions and taxable income calculation.
This may sound basic, but experts say it is one of the most overlooked areas.
Anita Basrur, Partner, Direct Taxation, Sudit K. Parekh & Co LLP, said employees should verify that the PAN, assessment year, gross salary and TDS figures are correctly reflected.
Imagine discovering after filing that your PAN was entered incorrectly. The tax deducted by your employer may not get linked to your account properly, potentially affecting your tax credit.
Employees should also ensure that the gross salary mentioned in Form 16 matches their payslips and annual salary records.
Many taxpayers only check whether tax was deducted from their salary.
However, experts say the more important question is whether the employer deposited that tax with the government.
Mehta pointed out that if TDS has been deducted but not deposited, the credit may not appear in Form 26AS, meaning the taxpayer may not be able to claim it while filing the return.
“This is something employees should immediately follow up with their employer,” he said.
A quick comparison between Form 16 and Form 26AS can help identify such issues before filing.
This is where many taxpayers unknowingly leave money on the table.
Whether it is HRA, LTA, NPS contributions or deductions under Chapter VI-A, every claim should be checked carefully.
Basrur said exemptions and deductions should match the investments and declarations submitted by the employee.
“Many times these could be incorrectly calculated or missed,” she said.
For example, if you submitted proof of investments under Section 80C, but the deduction is missing from Form 16, your taxable income may be higher than it should be.
The new tax regime is now the default regime. But that does not necessarily mean it is the best option for every taxpayer.
According to Mehta, one of the most common mistakes employees make is assuming that the tax regime reflected in Form 16 is automatically the one they should choose while filing their return.
“If your employer deducted TDS under the new regime, but you intend to claim deductions such as 80C, 80D or HRA, you must consciously opt for the old regime while filing,” he explained.
He added that taxpayers should also verify whether the correct standard deduction has been applied, i.e., Rs 75,000 under the new regime and Rs 50,000 under the old regime for salaried individuals.
This is perhaps the biggest misconception among salaried employees.
Many believe that if Form 16 is correct, the return is complete.
Not necessarily.
“Form 16 is a salary-and-TDS certificate, not a complete income statement,” Mehta said.
Income from savings accounts, fixed deposits, dividends, capital gains, freelance work or side gigs may not appear in Form 16 because the employer has no visibility of these earnings.
For example, if you earned Rs 25,000 in bank interest during the year and forget to report it, the tax department may already know about it through its reporting systems.
If there is one step experts want taxpayers to follow, it is reconciliation.
Mehta said the most frequent and costly mistake is filing returns solely based on Form 16 without checking the Annual Information Statement (AIS) and Form 26AS.
“Before you file, place Form 16, Form 26AS and AIS side by side and compare them the way the department does,” he advised.
AIS contains information on interest income, dividends, securities transactions and other financial activities reported to the tax department. Form 26AS shows taxes credited against your PAN.
Matching all three documents can help identify missing income, incorrect TDS credits and other discrepancies before they become a problem.
In other words, the biggest lesson from my conversations with tax experts was simple: don’t treat Form 16 as a document to be blindly trusted.
Instead, treat it as the starting point of your tax return, not the finish line.
A few extra minutes spent checking your PAN, TDS credits, deductions, tax regime and other income sources can save you from notices, tax demands and unnecessary stress later. When it comes to filing your ITR, accuracy matters far more than speed.