It is very important to know how hard the tax can hit an individual at the time of Income Tax Return Filing if they switch from one employer to other in the same Financial Year or they work under two employers. Form 16 is the mandatory requirement in respect of return filing for salaried individuals.

Form 16 is a certificate issued by an employer to an employee who provides details in respect of salary earned by the employee and tax deducted at source by the employer. It’s a TDS certificate issued by the employer to the employee. The employer takes into account the exemptions and deductions available to employee after considering the slab benefits and deduct
taxes at the time of payment of salary.

Multiple Form 16

It is a very common situation wherein employee switches employment during the year and fails to provide the details of previous employment to the current employer due to which deduction and exemptions is availed more than once. As a result of this, less TDS is deducted by the present employer and there is a huge outstanding tax liability and interest u/s 234(B) and 234(C) for the less tax payment for the financial year. This could have been easily avoided by just providing Form 16 of the previous employment to the current employer.

Steps to avoid High Taxes

In order to avoid the additional interest outflow, the employee should furnish the details of salary income received from the previous employer to the new employer. These particulars can be furnished in Form 12B (Form for furnishing details of income under section 192(2)). Tax will be deducted by the new employer after taking into account the income furnished by the employee in Form 12B which contains the details like TAN of the employer, PAN of the employee, tenure of employment with the previous employer, total amount of salary, allowances and perquisites received from the previous employer and details of investment(if any) made or expenses incurred that were eligible for deductions and were declared to the previous employer.

Moreover, if an employee is working with multiple employers in the Financial Year he/ she needs to file his return including all the Form 16 he has at the time of filing the return. In this context, a consolidated Form 16 is inappropriate since every employer has different TAN numbers. Every employee is thus required to file all the separate Form 16 he holds. Thus at the time of filing return the total aggregate salary of all the company shall be considered and tax will be paid simultaneously and refund will be provided as required.

Thus the employer can calculate and deposit the correct taxes only if the employee is providing him the correct details of his employment. Even in a situation where somebody doesn’t want to disclose the salary numbers of the previous employer to the new employer, the employee can request the employer to deduct taxes at a higher rate or can deposit the amount as advance tax by himself. This will help in avoiding any interest liability for the individual. The higher taxes deducted or advance taxes paid can later be adjusted with the tax liability during the year.

We at Taxmantra.com would be able to help you in filing of tax returns and also other tax related issues. Please feel free to check this page – Income tax return Filing  OR call us at +91 88 208208 11, +919230033070  OR email us at ‘info@taxmantra.com’