TDS and Form 16
TDS (Tax Deducted at Source) is the income tax Kredily withholds from salary each month based on an employee's declarations and regime. Form 16 is the year-end certificate summarizing that withholding, generated after the financial year closes.
How TDS is computed
Kredily calculates TDS automatically each payroll run, based on: - The employee's salary structure and projected annual income. - Their selected tax regime (old or new) — see Tax declarations, regime & income-tax override for how employees manage this. - Investment declarations submitted during the declaration window, which reduce taxable income under the old regime.
As declarations are submitted or updated during the year, TDS is recomputed on subsequent runs to true up the annual figure.
Generating Form 16
- Form 16 is generated after year-end, once the financial year's payroll and TDS figures are finalized.
- It's built from TRACES Part A (tax deposited with the government) and Part B (salary and deduction breakup) — both need to be available before a complete Form 16 can be issued.
- Generate and distribute Form 16 to employees from the documents/letters area once ready.
Common issues
- TDS looks too high or too low mid-year — usually a missing investment declaration or the wrong tax regime selected; have the employee complete declarations or confirm their regime.
- Form 16 missing figures or looks incomplete — check that TRACES Part A is available for the full year; Form 16 can't be finalized without it.
- Employee disputes their TDS total — cross-check against the payslips for each month in the financial year; a mid-year regime change or late declaration is the most common cause of a total that looks unexpected.
When to contact support
If TRACES data is available but Form 16 generation fails or produces incorrect figures, raise a ticket with the employee ID and financial year.
Related: Tax declarations, regime & income-tax override, Configure ESI