Employers streamline Form 16 Part B preparation for FY 2025-26 using Excel automation. This approach ensures accuracy and compliance with Income Tax Department rules.
Form 16 Part B Overview
Form 16 Part B details salary components, exemptions, deductions, and tax computations for salaried employees. Consequently, it supports seamless ITR filing under AY 2026-27. Moreover, it reflects updates like higher standard deductions in the new tax regime.
First, employers input gross salary breakdowns, including basic pay, HRA, and allowances. Next, the sheet calculates Section 10 exemptions, such as house rent allowance. Then, it applies Chapter VI-A deductions like 80C investments.
Additionally, Part B shows net taxable income, tax liability, and TDS details. Therefore, employees verify their earnings easily. Furthermore, it includes options for old and new tax regimes.
Key Features
This Excel utility handles bulk processing for up to 50 employees simultaneously. As a result, HR teams save hours on manual entry. Similarly, it auto-computes taxes per FY 2025-26 slabs under both regimes.
- Automatically converts numbers to words for professional output.
- Prevents duplicate PAN entries to avoid errors.
- Generates print-ready A4 PDFs with exact formatting.
- Supports offline use for data security and confidentiality.
In addition, it incorporates Budget 2025 amendments seamlessly. On the other hand, users customise employee-specific details flexibly. Meanwhile, compatibility spans MS Excel versions from 2003 onward.
Step-by-Step Preparation
Download a reliable Excel template aligned with AY 2026-27 guidelines first. Next, enter employer details like TAN and PAN in the master sheet. Then, add employee data, including PAN, salary breakup, and exemptions.
Afterwards, input deductions under Sections 16, 80C, 80D, and others. Subsequently, review auto-generated tax slabs and liabilities. Finally, generate and print individual Form 16 Part B sheets.
However, always cross-verify totals against payroll records. Consequently, this method minimises mismatches during ITR processing. Moreover, test with sample data before bulk use.
| Component | Description | Example Calculation |
| Gross Salary | Basic + Allowances + Perquisites | ₹10,00,000 |
| Exemptions (Sec 10) | HRA, LTA, etc. | ₹2,00,000 |
| Deductions (Chapter VI-A) | 80C, 80D investments | ₹1,50,000 |
| Taxable Income | Gross - Exemptions - Deductions | ₹6,50,000 |
| Tax Payable | Per slab rates + Cess | Auto-computed |
Benefits and Compliance
Automation reduces errors by 90% compared to manual methods. Therefore, employers avoid penalties from Income Tax notices. At the same time, employees gain transparent documents for self-assessment.
Furthermore, it aligns with TRACES portal requirements for TDS returns. In contrast to paid software, Excel remains cost-free and accessible. Eventually, small businesses scale efficiently without subscriptions.
Not only that, but it builds trust through consistent outputs. Similarly, offline operation protects sensitive PAN and salary data. To sum up, adopt this tool for FY 2025-26 to boost productivity now.
Form 16 clearly distinguishes tax computations under the old and new regimes for FY 2025-26. Employers reflect employee choices in Part B, affecting deductions and TDS.
Old Regime Deductions
Employees opting for the old regime claim extensive exemptions and deductions in Form 16 Part B. First, Section 10 covers HRA, LTA, and gratuity exemptions. Next, Section 16 allows standard deduction (₹50,000), professional tax, and entertainment allowance. Then, Chapter VI-A includes 80C (up to ₹1.5 lakh for PPF, ELSS), 80D (health insurance), 80G (donations), and 80CCD(1B) for NPS. Moreover, employer NPS under 80CCD(2) limits to 10% of salary. Consequently, taxable income drops significantly for investors. Additionally, home loan interest under Section 24(b) applies. Therefore, Form 16 lists these line-by-line for transparency.
However, higher slab rates (up to 30% from ₹10 lakh) apply after deductions. In addition, employees must provide proof during ITR filing. As a result, this suits high-deductible earners.
New Regime Deductions
The new regime, in default since FY 2024-25, simplifies Form 16 by limiting deductions. Primarily, the standard deduction rises to ₹75,000. Additionally, the employer’s NPS contribution under Section 80CCD(2) has been raised to 14% of salary. Meanwhile, Section 24(b) interest on let-out property rental income remains deductible. On the other hand, no HRA, LTA, 80C, or 80D applies. Similarly, family pension deduction is boosted to ₹25,000. Thus, Form 16 shows minimal lines, emphasising lower slabs: 0% up to ₹4 lakh, 5% to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh, 30% above.
In contrast, this benefits low-investment salaried individuals. Subsequently, TDS reflects slab benefits directly. Eventually, opt-out requires explicit declaration.
Key Differences in Form 16
Form 16 Part B explicitly states the chosen regime since FY 2024-25. Consequently, the old regime details full breakdowns; the new regime aggregates with highlights like enhanced standard deduction. Moreover, mismatches reduce during ITR due to clear reporting. At the same time, employees verify via AIS pre-filing.
| Aspect | Old Regime | New Regime |
| Standard Deduction | ₹50,000 | ₹75,000 |
| NPS Employer (80CCD(2)) | 10% of salary | 14% of salary |
| HRA/LTA/80C | Available | Not available |
| Tax Slabs | Higher rates, more brackets | Lower rates, simplified slabs |
| Form 16 Detail | Extensive lines | Limited, aggregated |
Additionally, switch regimes at ITR filing (except business income). Therefore, compare using calculators for FY 2025-26. Not only that, but the new regime often saves more for incomes under ₹15 lakh without heavy investments.
For salaried individuals earning ₹15 lakh annually in FY 2025-26, the new tax regime often proves better unless deductions exceed ₹3.75 lakh.
New Regime Advantages
Lower slabs make it attractive: 0% up to ₹4 lakh, then 5% to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh, and 30% above. First, claim ₹75,000 standard deduction plus 14% employer NPS under 80CCD(2). Next, no need for investment proofs simplifies filing. As a result, tax on ₹15 lakh (after standard deduction) drops to around ₹1.6 lakh, including cess, far less than the old regime without deductions. Moreover, it's default, so employers apply it automatically in Form 16 Part B.
However, skip HRA, 80C, or 80D entirely. Consequently, minimal paperwork appeals to non-investors. In addition, Budget 2025 enhancements widened its edge for mid-incomes.
Old Regime Scenario
Higher slabs start at 30% from ₹10 lakh after ₹50,000 standard deduction and 10% NPS. Nevertheless, claim HRA, LTA, 80C (₹1.5 lakh), 80D, home loan interest, etc. Therefore, if total deductions surpass ₹3.75 lakh—like rent (HRA), insurance, PPF—you save more, potentially ₹20,000 extra versus the new regime. On the other hand, proofs required during ITR raise compliance burden. Similarly, tax without deductions hits ₹2.57 lakh, making it worse for low savers.
At the same time, switch at ITR filing for salaried (no business income). Eventually, use Income Tax calculators for personalisation.
Comparison Table
| Factor | New Regime | Old Regime |
| Tax on ₹15L (basic) | ~₹1.6L incl. cess | ~₹2.57L (no deductions) |
| Standard Deduction | ₹75,000 | ₹50,000 |
| Key Deductions | NPS 14% only | HRA, 80C, 80D, etc. |
| Best For | Deductions <₹3.75L | Deductions >₹3.75L |
| Effort Level | Low (default) | High (proofs needed) |
Ultimately, calculate both via the e-filing portal; new wins for most at ₹15 lakh without heavy investments.
Download and Prepare At a time 50 Employees Automatic Income Tax Form 16 Part B Excel FY 2025-26 | Free Guide & Features
