Guide to Filing Income Tax Return after Job Change

A job change often brings welcome changes like a higher pay packet. However, you will need to compute your total income from your previous and present employers when you file your income tax . It can become confusing. Here is a guide on steps to follow for avoiding errors during filing income return after a job change.

Your employer calculates your Tax Deductible at Source (TDS) based on your salary. While estimating the TDS, they will consider the basic tax exemption. Your new employer should be informed if your previous employer has already given you the benefit of the minimum exemption limit. Otherwise, a part of your income might not be taxed accurately. Consequently, at the end of the financial year, you might find that you need to pay some extra tax. Interest might also be charged on the outstanding tax.To avoid such miscalculations, you should file the Form 12B to inform your new employer about your previous salary income. In the form, you will need to furnish details about the salary you received from your last employer, including all taxes deducted already. If you have made any tax-saving investments, you should provide those details as well.

The Income Tax Act (ITA) of India allows you certain exemptions on tax. The standard deduction is a rebate that reduces your taxable income. Apart from this, as per your eligibility, you can claim deductions under sections 80C , 80D, 80G and the like. However, you can avail the benefit of such deductions against your gross income only once. If your new employer is unaware of any previous 80C deductions, you may end up with double deductions. It will again lead to taxes payable while filing the income

Form 16 is a summary of the total salary your employer paid to you in a financial year and the taxes they deducted. When you change your job, you will have more than one Form16, issued by each employer, old and new. You must consider both while calculating your payable tax. Use both the forms to consolidate your salary, find details of exemptions, and claim relevant deductions and TDS from all the employers. You will arrive at the exact amount you are liable to pay as tax.

The form 26AS states the combined taxes your deductors deposited in a financial year on your behalf. You must compare the Form 26AS details with your Form 16 at the time of filing your return . If you detect any inconsistency, you must get those corrected promptly.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.