e-File ITR with Multiple Form 16
A taxpayer may have multiple Form 16 if they changed jobs during the financial year. They get Form 16 from both their current employer and past employer at the end of a financial year.
Follow these steps for filing your tax return with multiple Form 16:
Step 1: Collect All Form 16
Collect Form 16 from respective employers. A lot of people assume that they can’t be issued a Form 16 from the previous employer since they have left the job during the year. But you should contact your previous employer and ask for form 16. You can not file your ITR without knowing the taxable salary income earned from all the employers.
Step 2: Check TDS with Form 26AS
Check your Form 26AS and compare TDS amount with each Form 16. If there are any discrepancies between the details mentioned on Form 26AS and Form 16, report the same to your employer before filing your ITR.
Step 3: Combine Incomes & Re-calculate
Add up the salary particulars(basic salary, perquisites, allowances etc) from multiple Form 16 and recalculate your tax liabilities. Since Individual employers only consider salary payment made by them, your total tax liability might be different after adding up the multiple salary incomes during the year.
For Example – If employer A paid the salary of INR. 5,50,000 then he will deduct TDS on INR. 5,50,000 at slab rate. Now if you join employer B who has made payment of INR. 10,20,000 then he will deduct TDS on INR. 10,20,000 at slab rate. Whereas your actual taxable salary income will be INR. 15,70,000 and it will be charged to tax as per applicable slab rates.
Step 4: Include all Chapter VI-A deductions
If you hadn’t mentioned correct/complete details regarding your tax saving deductions to your employers, there are chances of excess/short TDS deductions. Your tax liabilities might change after calculating the combined income and deductions from multiple employers. So don’t forget to include all chapter VI-A (Section 80) deductions while calculating taxable income.
Step 5: Pay Self Assessment Tax
If you’re falling short in TDS paid, you need to pay the difference, plus interest u/s 234A, 234B, 234C as Self-Assessment tax before you file your return. After payment of self-assessment tax, you can add the details of the challan in return and file your ITR.
If there’s an excess in TDS paid after combining the income and deductions, you can claim for refunds in your ITR.
Step 6: Consolidated Form 16
You can also ask your current employer to issue you a consolidated Form 16 where they’ll club your income details from your previous employer using your Form 12BB – in which case your current employer will calculate & deduct TDS as per your combined total income.
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1. Which ITR should I file if I have multiple Form 16?
ITR is determined based on the type of income and not a number of Form 16 received. Individual taxpayers who have earned income from salary needs to file ITR-1.
2. How to file ITR if I only have Form 16 from my current employer and not from my previous employer?
First, add the salary income of the current employer as per Form 16. And then calculate the taxable salary from the previous employer as per salary slips and file your ITR.
3. Is Form 16 mandatory for all employees?
The provisions in the Income Tax Act make it compulsory for an employer to issue Form 16 to his employee if TDS has been deducted from his salary. Form 16 is the certificate issued under section 203 of the Income-tax Act for tax deducted at source (TDS) from income under the head “salary.”