ITR filing: How to file income tax return when you have more than one Form 16 due to job change Employers must issue Form 16 to employees by June 15. This allows individuals to file their ITR by July 31, 2024 for the financial year 2023-24. Those who change jobs in a year need Form 16 from each employer
Many salaried individuals would have changed jobs in FY 2023-24 — between April 1, 2023, and March 31, 2024 — sometimes even more than once. They could face some challenges while filing their income tax returns (ITRs) because of multiple Form 16. Understanding certain things can help them deal with the situation in an easier way.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} Form 16 is a TDS certificate that provides information on the salary paid during the financial year and how much tax was deducted on it by an employer. Employers have to issue Form 16 mandatorily to employees by June 15. This enables salaried individuals to file ITR by July 31, 2024 — the last date to file ITR for FY 2023-24 (AY 2024-25).
So salaried individuals who have switched jobs within a financial year have to collect Form 16 from each place of employment.
Such individuals may struggle to file an ITR if they have two or more Form 16 because of the complexity in computation of taxable income, exemptions to claim, total tax liability and other such entries. Some entries can also get duplicated or omitted when more than one employer is involved, leading to problems later on.
Sudhir Kaushik, Co-founder & CEO, Taxspanner, says, “Individuals, who changed jobs during the financial year should remember that tax liability can rise at the time of ITR filing because each employer considers exemptions and deductions in their calculations (depending on the tax regime chosen). So some things may be claimed twice in a single financial year. Further, interest on non-payment of advance tax under sections 234 B and C can also be levied; this too can increase the tax liability.”
Kaushik explains the steps that a salaried individual should follow to file ITR with multiple Form 16:
Step 1: The first step involves collecting Form 16 from all employers. All the TDS certificates will show the amount of tax deducted in the form of TDS during the financial year. The salaried individual should calculate the total gross salary (salary before taking any deduction and exemption into account). Part A of Form 16 will show the total amount of tax employers have deducted in an FY. For calculating gross taxable salary, the salaried individual should add the following heads from Part B of all Form 16.
Salary as per provisions contained in Section 17(1)Value of perquisites under Section 17(2) Profits in lieu of salary under Section 17(3)There is a row that will show the total from these three heads. You can directly take the total from there as well.
Step 2: The next step involves downloading Form 26AS and Annual Information Statement (AIS) from the income tax department’s e-filing website. After getting these, the salaried individual should match the salary and TDS amount in these documents with the entry in Form 16. Remember, there must be no mismatch in the numbers mentioned in all three documents. If the TDS details do not match, the individual won’t be able to take credit for excess taxes shown in Form 16. The individual should inform the employers concerned immediately if there is any mismatch.
Step 3: To file ITR, the total taxable income has to be calculated. This includes salary income from all the employers, plus any other income such as interest income, dividend income, capital gains and others. Don’t forget to claim exemptions and deductions from specific incomes. Remember, each employer would have taken deductions into account. However, deductions and exemptions can be claimed only once. Hence, HRA exemption (in old tax regime) and standard deduction of Rs 50,000 (in both tax regimes) can be claimed only once from the total salary income from all the employers.
Step 4: Once the gross total income is calculated, the next step involves claiming deductions (depending on the tax regime chosen). The new tax regime is the default tax regime. Hence, an individual has to opt for the old tax regime to claim common deductions.
Under the old tax regime, a salaried individual can claim deductions under sections 80C to 80U. A salaried individual can also claim deduction of Section 80CCD (2) — employer’s contribution to NPS. Once the deductions are claimed, the individual will have the net taxable income.
Step 5: The total tax liability must be computed using the net taxable income. Penal interest under Section 234B can be applicable if there was advance tax liability and the salaried individual has failed to deposit the same. Further, if there is a shortfall in advance tax amount, then penalty under Section 234C will be applicable.
Step 6: Once the total tax liability is calculated along with penal interest, if any, the net tax liability has to be computed. This is done after deducting TDS, TCS and advance tax (if any) from the total tax liability. If there is any shortfall in tax liability, the individual has to deposit the tax before making final ITR submission. He can claim a refund if excess taxes have been paid.
Form 16 received from present employer
Usually, it becomes difficult for a salaried individual to get Form 16 from previous employers. The question that arises here is how a person can file ITR if he has Form 16 from only the current employer.
Kaushik says, “In such a situation, one should use salary slips from their previous employer to ascertain the total salary income. The total salary should be taken before deducting any taxes and EPF contribution into account.”
Once the total salary from all the employers is calculated, follow the steps mentioned above to file the ITR.
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This story originally appeared on: India Times - Author:Faqs of Insurances
