Summary of this article
Income tax return must combine salary from both employers into one ITR
Reconcile Form 16 with Form 26AS and AIS before filing
Avoid claiming deductions and exemptions twice in the same ITR
Pay self-assessment tax early to avoid income tax demand and interest
Filing an income tax return needs a little more care when you have worked for more than one employer during the year. A taxpayer may receive two Form 16s, while each employer may have calculated tax without considering income earned or deductions claimed at the other organisation.
For FY 2025-26, salary from both employers must be reported in a single Income Tax Return (ITR) for assessment year (AY) 2026-27. Taxpayers should collect both Form 16s and consolidate gross salary, exempt allowances, taxable perquisites, and tax deducted at source (TDS).
“When someone switches jobs mid-year, they don't file two separate returns; everything gets consolidated into a single ITR. The first step is collecting Form 16 from both employers and adding up the salary figures from each,” says Amitraj Kaushal, advocate, Supreme Court of India.
Taxpayers should not report only the salary mentioned in the latest Form 16. Each employer reports only what it paid during the employment period. If the new employer was not informed about the previous salary through Form 12B, the combined TDS may fall short of the final liability.
Reconcile Form 16 With Form 26AS And AIS
Before filing, taxpayers should compare both Form 16s with Form 26AS and the Annual Information Statement (AIS). Form 26AS shows the TDS deposited against the Permanent Account Number (PAN), while AIS may also reflect bank interest, securities transactions, perquisites or employee stock option-related entries.
“Before filing, go through every Form 16 you have and cross-check it against Form 26AS and the AIS. Check the Tax Deduction and Collection Account Number (TAN) listed for each employer, the salary figures, and the TDS amounts — these need to line up,” says Dinesh K. Jain, managing partner and chartered accountant (CA), Dinesh Aarjav & Associates, Chartered Accountants.
Any mismatch should be raised with the employer before filing. Tax credit can be claimed only for TDS reflected in the tax department’s records. Incorrect or missing entries may delay refunds or lead to processing issues.
Claim Deductions Only Once
Taxpayers must also ensure that deductions and exemptions are not claimed twice. Both employers may have separately allowed the standard deduction, Section 80C investments, Section 80D health insurance, house rent allowance or home loan interest while calculating TDS.
“Both employers usually apply the full standard deduction and Section 80C benefit independently while calculating TDS, since neither knows about the other's calculation. But a taxpayer is only entitled to claim these once in total for the year,” says Kaushal.
The return should be prepared afresh using actual investment proofs, rent receipts, insurance premiums and other eligible documents. Other income, including bank interest and capital gains, should also be included while determining the final liability.
“If that recalculation shows a shortfall, it's better to pay the balance as self-assessment tax before filing rather than letting it surface as a demand with interest attached later,” says Jain.
A fresh computation before filing can help taxpayers avoid excess tax payment, refund delays, notices, or an unexpected demand after processing.
FAQs
1. Do I need to file separate ITRs for income received from two employers?
No. Salary received from both employers during FY 2025-26 must be combined and reported in one ITR for AY 2026-27.
2. What should I do if the TDS in Form 16 does not match Form 26AS?
Ask the concerned employer to correct the mismatch before filing. TDS credit can be claimed only when it is reflected in Form 26AS.
3. Can deductions be claimed separately for each employer?
No. The standard deduction and benefits under Sections 80C and 80D can be claimed only once for the financial year, subject to eligibility.
