Tax season is here. Taxpayers have begun gathering salary slips, bank statements and transaction records for filing their Income Tax Returns (ITRs) for FY 2025-26. Among the key documents required during the process is Form 16, a certificate issued by employers.
For salaried employees who changed jobs during the financial year, tax filing can become a little more difficult. Such individuals may receive two Form 16s, one from their previous employer and another from the current one, making it essential to reconcile income and tax details carefully before filing returns.
What Is Form 16?
Form 16 is a Tax Deducted at Source (TDS) certificate issued by employers to their employees. It serves as proof that tax has been deducted from salary and deposited with the Income Tax Department on the employee's behalf.
The document contains details of salary paid during the financial year, tax deducted by the employer and various deductions claimed by the employee. It is one of the most important documents used while filing an income tax return.
The Challenge Of Having Two Form 16s
For employees who switched jobs during the financial year, tax filing can become more complicated. Such taxpayers typically receive separate Form 16s from each employer, making it necessary to consolidate salary income and tax details from both organisations before filing their returns.
Don't Forget To Collect Form 16 From Your Previous Employer
Even after an employee resigns, the former employer remains responsible for issuing Form 16 for the period of employment. Many taxpayers focus only on obtaining Form 16 from their current company and realise later that they are missing salary and TDS details from their earlier job. This can create complications while filing returns and calculating total taxable income.
Not Informing The New Employer About Previous Salary
One of the most common mistakes made after switching jobs is failing to disclose income earned from a previous employer. If the new employer is unaware of the earlier salary and tax deductions, it may calculate TDS only on the salary being paid by the new company. This can result in incorrect tax calculations and a tax shortfall when the employee files their ITR. Employees can use Form 12B to declare their previous income to the new employer.
Include All Sources Of Income
Taxpayers are also required to disclose income from all employers during the financial year. This includes capital gains, part-time work, freelance roles or savings account interest, etc.
Verify Form 26AS Carefully
Tax professionals recommend checking Form 26AS before filing returns. Form 26AS is linked to a taxpayer's PAN and contains details of tax deducted at source by all deductors. If a person has changed jobs during the year, TDS entries from both employers should be reflected in this statement.
Check Deductions And Exemptions
Job changes can affect deductions and exemptions claimed during the year. Benefits such as House Rent Allowance (HRA), standard deduction and deductions under Sections 80C, 80D and 80G may vary depending on the employer and investment declarations made. So, taxpayers are advised to review these deductions carefully and ensure they are claimed only once while computing their final tax liability.
Standard Deduction Being Claimed Twice
Employees who switch jobs during a financial year may end up claiming the standard deduction and certain tax benefits twice. This can happen when both employers independently calculate tax liability and consider deductions such as the standard deduction and those available under Chapter VI-A. To avoid such issues, employees should disclose details of salary earned, deductions claimed and tax deducted by their previous employer to their new employer.
Failure To Verify Details In AIS And TIS
Many taxpayers overlook the information available in their Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) before filing returns. These records contain important details including securities transactions, interest income, foreign remittances and other financial activities. Since the figures reflected in TIS are often pre-filled in the ITR form, taxpayers should carefully review them and ensure they match their actual income and investments.
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