Filing Income Tax Return (ITR) for a salaried person is not difficult. The employer deducts the applicable taxes every month and at the end of any financial year, the employee collects Form16, which has all the details of the taxes paid throughout the year. But things might become a bit complicated if the employee has changed jobs and has more than one Form 16.
Let’s find out how he/she responds to the situation.
After an employee has collected all the Form 16 from all the employers, he/she should do the following, say experts:
How to file ITR if you changed jobs
The salaried individual should calculate the total gross salary, which is the amount before any deduction/exemption. Part A of Form 16 will reveal the amount of tax deducted in the previous financial year.
Experts advise that the figures under “Salary as per provisions contained in Section 17(1)“, “Value of perquisites under Section 17(2)” and “Profits in lieu of salary under Section 17(3)” should be added to arrive at the total figure.
Second step
Then the employee would download Form 26AS and Annual Information Statement (AIS) from the website of the Income Tax Department. There must be mismatch between the salary and TDS amount in these documents and Form 16.
Third step
In the third step he/she has to calculate the total taxable income which should include the income from all the employers. To this amount, any income from interest, capital gains from the sale of any assets or dividend from investment should be added.
For example, in the old tax regime exemption for House Rent Allowance (HRA) and standard deduction of Rs 50,000 can be claimed only once from the total salary.
Fourth step
The next step deductions have to be claimed, but it is applicable only in the old tax regime.
A range of deductions from Sections 80C to 80U of the Income Tax Act 1961 are available. Other sections, too, offer tax deductibility.
Fifth step
This net taxable income is used to calculate one’s tax liability.
After the total tax liability is calculated, TDS (tax deducted at source), TCS (tax collected at source) and advance tax are deducted from the total tax incidence.
If the individual has not paid the full amount, he/she must pay the shortfall while filing the ITR.
Conversely, the taxpayer has the option of claiming a refund if excess amounts have been paid.
Remember the ITR filing process is completed only after the return has been verified. It can be easily done online. There are offline processes too.
Changing jobs is a regular feature in the current context but it might throw up challenges while filing ITRs. How does one do it with multiple Form 16s? Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
