Income Tax Filing Using Multiple Form 16

Filing your Income Tax Returns or ITR can be cumbersome when you have multiple Form 16. This can happen when you have switched jobs or have more than one employer. Let’s run through the solution for filing ITR with two Form 16.

Key Takeaways

• If you change employment or work for many employers in the same fiscal year, you must file multiple Form 16 income tax forms.
• The format of Form 16 is decided by the Income Tax Department and remains constant across India. It can be downloaded online from the TRACES website. Form 16 has two parts; namely, Part A and Part B.
• How to File ITR with Multiple Form 16?
• Notify Your Employer About Your Previous Job
• Combine Salaries From All Employers
• Manage Tax-Exempt Allowances
• Claim All the Deductions
• Cross-Check With Form 26AS

Why File Multiple Forms 16?

The employer issues Form 16 for your earnings within a single fiscal year. However, if you change employment or work for many employers in the same fiscal year, you must file multiple Form 16 income tax forms.

Format of Form 16

The format of Form 16 is decided by the Income Tax Department and remains constant across India. It can be downloaded online from the TRACES website. Form 16 has two parts; namely, Part A and Part B.

Part A of the form consists of the details of tax deducted and deposited to the government through TDS (Tax Deducted at Source). This section also contains the TAN (Tax Deduction and Collection Account Number) of the employer who has deducted the tax.

Part B of Form 16 contains a detailed breakup of your salary, allowances exempted under Section 10, and income tax deductions that have taken place like financial investments, donations, interest earned, etc.

How to File ITR with Multiple Form 16?

You could have a situation that has led you to deal with multiple Form 16 between a financial year. So, how to file ITR with two form 16 without mixing up the taxes?

Let’s go through a step-by-step procedure given below.

1. Notify Your Employer About Your Previous Job

Your current employer has to be aware of your previous job if you have had a job change in that particular financial year. If your current employer is not aware of your previous employment, then the taxes by the current employer will be miscalculated as they will only consider the salary they are paying you. Notifying your company about your previous salary eliminates any kind of error in computing your taxes.

2. Combine Salaries From All Employers

You have to consolidate the income received from all employers for that particular financial year. If you do not include certain income in the ITR, you can get a notice from the income tax department for not reporting the salary, as it is taxable irrespective of whether TDS is deducted or not.

3. Manage Tax-Exempt Allowances

You have to calculate the allowances that are exempt from tax, like House Rent Allowance (HRA) or travel allowance. As the salary structure changes with every job, you may or may not have HRA, and if you do, the amount may change. But you can still claim this allowance in ITR if you are not being paid HRA. You have to calculate the amount of house rent exempted for that year from the various income and get refunded in case excess tax was deducted.

4. Claim All the Deductions

After you have combined the income earned by you in that particular financial year, you will also have to combine the tax deducted. If you have invested your money in any tax-saving financial instruments, you can claim those deductions under specific sections like Section 80C. You also need to maintain the documents and proofs related to the income tax deductions for future reference.

5. Cross-Check With Form 26AS

Your Form 26AS contains all the details regarding the TDS deducted from your salary each month by all employers. This form comes in handy to cross-check your tax calculation and deduction. In case of some mismatch, it should be immediately brought to the notice of your employer and have it resolved before filing your ITR.

6. Tax Dues

There may be some tax dues that are pending when you check due to inaccurate calculations of taxes. This miscalculation could be due to the benefit of tax-saving deductions allowed by more than one employer or the minimum exemption limit allowed by all employers. To avoid this, you can submit Form 12B to your current employer, who gives them access to your salary break-up and deductions.

How to Get Form 16 from a Previous Employer?

This circumstance can occur if you didn’t receive Form 16 from your previous job or if the business went bankrupt. In this situation, you can file multiple form 16 using the methods below.

• Make tax deductions and salary breaks using the paystubs from the prior employer.
• Consolidate your revenue now and subtract any exclusions, such as rent or travel expenses.
• Finally, determine the tax liability and subtract the TDS that both employers specified in their individual Form 16s.
• You must pay any outstanding taxes if any. To double-check the deductions, use Form 26AS.

Wrapping Up

You may have found this procedure tedious which is why there is an easier method of doing this. You could hire a CA or a tax lawyer to sort out this situation with multiple Form 16 for you. You might have to spend some money on this, but with the assistance of a professional, you can complete your tax returns with confidence. However, you can also use an income tax calculator to analyze your circumstances and choose the best course of action.

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