Summary of this article
Job changes can result in multiple Form 16 certificates
Combine salary and TDS details from every employer
Match Form 16 figures with AIS and Form 26AS
Filing errors can lead to tax shortfalls and penalties
If you have switched jobs during the financial year, you will receive a Form 16 from each employer. Each certificate will show only the salary paid and tax deducted while you worked there.
Problems may arise if the employee does not report the earlier salary to the new employer. Both employers may separately calculate the standard deduction, consider the basic exemption limit, or allow the same tax-saving deductions. While each Form 16 may appear correct on its own, the combined tax liability can show a shortfall.
A salaried taxpayer who switched jobs found himself in trouble after failing to file his return for financial year 2018-19. He had received Form 16 from both employers and earned more than Rs 30 lakh during the year.
The taxpayer later faced reassessment proceedings and a penalty of Rs 3.74 lakh. Although he subsequently filed the return declaring income of Rs 30,22,900 and the assessing officer accepted the income, the failure to file the return on time led to penal consequences.
Match Both Form 16s With AIS And Form 26AS
Employees should first obtain Form 16 from every employer they worked for during the year. The salary, taxable allowances, bonuses, perquisites, deductions and tax deducted at source (TDS) shown in these documents should then be combined.
“Employees who have changed jobs during the year should collect Form 16 from every employer and reconcile the salary, TDS and deductions reported in each,” says Anita Basrur, partner, direct taxation, Sudit K. Parekh & Co LLP.
The consolidated figures should be compared with Form 26AS and the Annual Information Statement (AIS). These records help taxpayers check whether the TDS claimed in the return has actually been deposited and reported against their Permanent Account Number (PAN).
Employees should also watch for overlapping salary periods, joining bonuses, leave encashment, and perquisites. The standard deduction and basic exemption limit cannot be separately claimed against the salary received from each employer.
Tax-saving deductions also require attention. If an employee submits the same insurance premium receipt, home-loan certificate or investment proof to both employers, the deduction may be considered twice while calculating TDS. It must be corrected while filing the final return.
What If Form 16 Is Delayed Or Incorrect?
Employers are required to issue Form 16 after completing their TDS reporting. However, a former employer may delay it, or the certificate may contain an incorrect salary or TDS figure.
The employee should contact the payroll or finance team and seek either the certificate or a correction. If TDS has been deducted from salary but does not appear in Form 26AS, the employer may have to revise its TDS return. Salary slips, bank statements, TDS details and email correspondence should be preserved.
“At the time when an employee shifts to a new job in the middle of the financial year, disclose the income and TDS of the previous employer,” says Basrur.
This allows the new employer to calculate tax on the employee’s total estimated annual income instead of treating the new salary as the only income for the year.
Before filing the ITR, the employee should calculate the final tax liability after combining all salary income and eligible deductions. Any shortfall should be paid as self-assessment tax. Filing on time is equally important: confusion over multiple Form 16s does not remove the taxpayer’s obligation to report the total income correctly.
FAQs
1. Do I need to report salary from every employer in my ITR?
Yes. You must combine the salary and other taxable payments received from all employers during the financial year.
2. What should I do if Form 16 is delayed or contains incorrect details?
Contact the former employer for issuance or correction. Meanwhile, verify salary and TDS using payslips, bank statements, Form 26AS, and AIS.
3. Can deductions and the standard deduction be claimed separately for each job?
No. Duplicate deductions considered by different employers must be corrected while filing the ITR, and any resulting tax shortfall should be paid.
