Income Tax Law / Tax Deducted at Source

Section 203: Certificate for Tax Deducted at Source (TDS)

Section 203 of the Income-tax Act, 1961 requires a person who deducts tax at source to give the recipient a prescribed certificate showing the tax deducted and related particulars. For the new tax-year framework beginning 1 April 2026, the corresponding certificate obligation is contained in section 395(4) of the Income-tax Act, 2025, read with rule 215 of the Income-tax Rules, 2026.

Applicable law: The Income-tax Act, 2025 applies from 1 April 2026, while the 1961 Act remains relevant to earlier years and proceedings under the transition arrangements. Use the prescribed form for the relevant deduction and period; do not assume old and new form numbers are interchangeable.

What is a TDS certificate?

A tax deducted at source (TDS) certificate is a statutory document issued by the person responsible for deducting tax (the deductor) to the person whose payment or income was subject to deduction (the deductee). It records the amount and rate of tax deducted and the prescribed identifying and payment details. It assists the deductee in reconciling tax credit with the Income Tax Department's records.

The certificate is not itself proof that a tax credit has been correctly posted to the deductee's account. The deductee should also check Form 26AS, the Annual Information Statement where relevant, and the applicable tax-credit records.

Section 203 of the Income-tax Act, 1961: legal requirements

Section 203(1): certificate after deduction

Every person deducting tax under the relevant TDS provisions of the Chapter must, within the prescribed period, furnish a certificate to the person whose income is credited or paid. The certificate must specify the tax deducted, rate of deduction and other particulars prescribed by the rules. The obligation also extends to applicable dividend-payment arrangements mentioned in the statutory provision.

Section 203(2): tax paid by an employer

Where an employer pays tax on an employee's non-monetary perquisite under section 192(1A), the employer must provide the prescribed certificate showing the tax paid to the Central Government, the applicable rate and other required details. This is distinct from ordinary salary TDS deducted from an employee's payment.

Legislative note: The original section was substituted in 1967, renumbered when subsection (2) was inserted in 2002, and later amended. The former subsection (3) was omitted with effect from 1 April 2010. These historical amendments do not remove the substantive certificate duty under subsections (1) and (2).

Certificates and deadlines under the 1961 Act

Certificate	Typical use	Ordinary deadline
Form 16	Salary TDS and prescribed employer-paid tax particulars	15 June following the financial year of deduction
Form 16A	Most non-salary TDS, such as professional fees or interest	Within 15 days after the due date for the relevant quarterly TDS statement
Form 16B	Specified immovable-property transfers under section 194-IA	Within 15 days after the due date of the relevant challan-cum-statement
Form 16C	Specified rent payments under section 194-IB	Within 15 days after the due date of the relevant challan-cum-statement
Form 16D	Specified payments under section 194M	Within 15 days after the due date of the relevant challan-cum-statement

These are the established 1961 Act forms. Some transactions have additional or distinct certificate and reporting requirements. Check the applicable section, rules, amendments and portal instructions for the particular deduction.

Income-tax Act, 2025: section 395(4) and rule 215

Under the Income-tax Act, 2025, section 395(4) addresses the furnishing of certificates relating to tax deducted or collected at source and relevant employer-paid tax. Rule 215 of the Income-tax Rules, 2026 specifies the applicable forms, recipients and time limits. The prescribed certificate is to be generated and downloaded through the designated tax-system portal where the rule requires this process.

For example, the annual salary TDS certificate formerly issued as Form 16 is now Form 130 for the applicable 2025 Act framework. Other certificate forms have also been renumbered. The official mapping guide and rule 215 table should be consulted for each payment category, rather than relying solely on historical form labels.

Transition example: A salary certificate relating to an earlier financial year governed by the 1961 Act may still use the corresponding 1961 Act form, even if it is furnished after 1 April 2026. A certificate relating to deductions governed by the 2025 Act must follow the relevant 2026 Rules. Verify the tax year and underlying deduction before selecting a form.

Practical steps for deductors and deductees

Deduct correctly: Apply the appropriate TDS provision and rate for the transaction and year.
Deposit and report: Remit the deduction and furnish the prescribed TDS statement with correct PAN, TAN and payment particulars.
Generate the certificate: Use the designated TRACES or Income Tax Department facility, as applicable, and select the form prescribed for that period.
Deliver on time: Provide the certificate to the recipient by the statutory deadline, retaining evidence of delivery.
Reconcile: If details are wrong or missing, correct the relevant TDS statement and obtain a revised certificate where appropriate.

Example: salary TDS

An employer deducts tax from an employee's salary during a financial year governed by the 1961 Act. After filing the required TDS statements, the employer issues Form 16 within the prescribed deadline. For a corresponding salary deduction under the 2025 Act framework, the employer should apply section 395(4), rule 215 and the relevant Form 130 requirement.

Example: professional fees

A business deducts TDS from a consultant's fee. Under the applicable 1961 Act rules, the deductor generally issues a quarterly Form 16A after filing the TDS statement. The consultant should compare the certificate with the tax-credit information reported to the department. Under the 2025 Act, the business must instead check the form and timing specified in rule 215 for that deduction category.

What happens if a certificate is not issued?

Failure to furnish a required TDS certificate may attract consequences under the applicable penalty provisions, including section 272A(2)(g) of the 1961 Act where its conditions are satisfied. The question of penalty, its amount and available statutory relief depends on the relevant period and facts. Failure to issue a certificate should not be confused with failure to deduct or deposit tax, which is governed by separate provisions, including section 201 of the 1961 Act.

Frequently asked questions

Is Form 16 the same as Form 16A?

No. Under the 1961 Act, Form 16 is generally used for salary TDS; Form 16A is generally used for non-salary TDS. Their issue frequencies and prescribed details differ.

Can a taxpayer claim TDS credit without receiving a certificate?

The right to TDS credit depends on the applicable law and departmental records, not merely possession of a paper certificate. If the certificate is missing, verify the deduction and its reporting, and ask the deductor to issue it or correct the statement.

Has Form 16 been renamed after 1 April 2026?

For certificates governed by the Income-tax Act, 2025 and Income-tax Rules, 2026, the corresponding annual salary TDS certificate is Form 130. Historical 1961 Act compliance continues to use the applicable old forms.

Does the deductor have to issue a certificate where no TDS was deducted?

Section 203 concerns certificates for tax actually deducted or qualifying employer-paid tax. A nil-deduction case does not ordinarily create a certificate obligation under this provision merely because a payment occurred; separate reporting requirements may nevertheless apply.

Official law and resources

Updated 27 October 2026. This is a general legal information article, not an alternative to the enacted law, rules, notifications or professional advice for a specific case.