If you have changed jobs in the last financial year, filing income tax
returns can be tricky. You will have two Form 16s
— one each from the new and previous employer. For the new employer to consider the income and deductions of the previous employer, the employee needs to provide details in the prescribed format by filling up Form 12B. If you have not done it, you will need to compare the two Forms and compute the total income, deductions and tax liability.
Every employer gives to its employees Form 16, which have details of such income received, the tax that was deducted at source and tax benefits that an employee has claimed. If the new employer has not considered these details from the previous one, and in most cases, the employee would be liable to pay tax. Similarly, if the new employer has not considered Section 80C deductions, the employee may end up getting deductions twice.
When there are multiple Form 16s, it’s best that a taxpayer
prepares a revised statement of income. “It’s essential to do so as the new employer could be deducting lower taxes considering only the salary it pays you. This can even lead to a change in your tax slab,” says Chetan Chandak, head of tax research, H&R Block India. Consider this: An individual who earns a salary of Rs 50,000 a month changed job after six months into the financial year and joins another company at Rs 60,000. The first employer would deduct tax considering an annual income of Rs 300,000 and the second one on Rs 360,000.
In both the cases, the employers would hardly deduct any tax. But the liability is on the total income of Rs 660,000, which puts the individual in the 20 per cent tax bracket.
It is best is to consolidate salary earned from all the employers for the financial year and then deduct exempt allowances and perquisites like house rent allowance and travel allowance. Check whether you have claimed deductions twice or just once. Then, calculate the tax liability based on the income tax
slab and subtract the TDS deducted by all the employers mentioned in the Form 16s.
“Don’t use your salary slips for this as they may not reflect the different deductions and perquisites. It’s mandatory for employers to provide Form 16.
If they don’t do it, the employee can file a complaint with the tax department,” said Naveen Wadhwa, general manager, Taxmann.com.
If you plan to e-file your returns on the income tax
website all by yourself, pick the right ITR form, fill the general details such as the name and address. In the income details section, enter income from salary. Add the incomes from both the companies and mention them. Then, provide various deductions claimed, and the tax utility will automatically compute the tax payable. On the next page, you will get details of tax deducted at source from salary. In case the new employer details are not mentioned, you have the option to add it. Verify the taxes paid and also get details of refund or amount payable if any.
Finally, use Form 26AS to check whether your computation is in accordance with the income tax
record. If you find the process tedious, you can also use the services of online tax-filing websites. These platforms automatically compare and compute the taxes from multiple Form 16s.
Rectifying the errors of Form 26AS
Form 26AS shows tax deducted on behalf of the taxpayer
Figures in the TDS certificates should match with those in Form 26AS
There could be errors due to many reasons such as non-filing of TDS return
The only option is to request the deductor to revise the TDS return
Ensure that the TDS certificate is the one downloaded from TRACES portal
In case the PAN available in the uploaded data is not yours, approach the assessing officer