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ITR Filing Income Tax |How to File Income Tax Using Multiple Form 16 | YES BANK

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Whether you are a new taxpayer or a regular one, you must know what Form 16 is. It is a critical form in Income Tax Return (ITR) that contains details about you, your salary, your employer and the Tax Deducted at Source (TDS) against your PAN and deposited with the government.

However, if you switched jobs in a fiscal year, you would likely have two Form 16 from different employers. If you are worried about what to do with multiple Form 16, read on!

Filing your income tax return using more than one Form 16

  • Consolidate total salary earned from different employers in a particular financial year. You can use both the Form 16 to estimate the total income; use information from ‘Salary under Section 17(1)’.

  • Make the deductions for exempt allowances such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), etc. You can claim the HRA even if you did not provide the rent receipts earlier. You can submit them at the time of ITR filing.

  • Once through, make eligible deductions under Section 80C, 80CCD, 80D, 80G, 80E, and more. If these deductions have already been made in any one of Form 16, you cannot claim these exemptions again.

  • After making legible exclusions, arrive at your taxable income and calculate your tax liability according to the applicable income tax slab. When you compute your tax liability, consider all TDS deductions made by all employers mentioned in Form 16. Ensure to check the TDS amount with Form 26AS.

  • You can download Form 26AS from the TRACES website. This form includes consolidated information on TDS, advance tax, self-assessment tax, etc. submitted with the Income Tax Department against your PAN card. If you find a mismatch between the Form 26AS and Form 16, prioritise information in Form 26AS and file your taxes accordingly.

  • When verifying Form 16, be very particular about the Part B of the form. This section can include multiple duplicate entries, like:

  • Standard deductions

  • Tax saving investments under different Sections like 80C, 80CCD, 80D, 80G, 80E, etc.

  • HRA Exemption (in case it is given for the whole year by both employers)

What to do in case tax is due?

Upon compilation of Form 16 online, there is a possibility that you might have a pending tax liability. Moreover, if your employer is unaware of your previous job and overall income, the current tax computation may be faulty. You could have received minimum income exemptions and the benefit of deductions twice. Thus, leading to an inaccurate Form 16. This will, in turn, cause a problem in tax filing and also lead to a ‘tax due’.

To avoid such a situation, you must inform your current employer about the previous employment, your total salary, as well as deductions, availed. So, when you join your new job, submit Form 12B to the new employer, which will include details like Basic Salary, HRA, LTA, perks and other allowances. Moreover, it also specifies deductions made under Section 80C, 80CCD, 80D, 80E, 80G, etc. in income from the previous employer.

When you submit an accurate Form 12B in your new company, your employer will be able to give you a consolidated Form 16. This will, in turn, minimise complications during the filing of IT returns.

After you have received and verified information across all Form 16 online, using the above-mentioned steps, prepare all your other documents accurately latest November 30, 2020, and file your ITR. In case you have more complications and issues in your income tax return filing, you can always consult a chartered accountant to file the taxes on your behalf.

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