How to file Tax Returns with Multiple Form 16 ?
Where an employee has more than one Form 16, it is known as Multiple Form 16s. In such cases tax computation should be made after considering every Form 16 given by the employer. An employee has to prepare a revised statement of income and tax liability to ensure that the tax is computed as per the correct slab rates.
Two or more Form 16 will lead to confusion sometimes whether your taxes computed are correct or not. This will happen in cases where we skip informing our new employer about our previous salary.
Suppose Mr. Arjun is a software engineer and joined new Software Company XYZ Technologies on 1st October 2017, previously he was working with ABC Solutions. Now, He got his Form 16 from ABC Solutions for a period of 1st April 2017 to 30th September 2017 and got another Form 16 from XYZ Technologies for a period of 1st October 2017 to 31st March 2018. Now, Mr. Arjun has got two Form 16s, which is known as Multiple Form 16s.
Lets us understand how to consolidate the figures when you’ve more than one Form16:
Case -1 All Form 16s received by the Employer
First, add your salary earned from all the employers for the relevant financial year.
Secondly, subtract the amount of exempted allowances and perquisites for example HRA, Conveyance allowance etc. It might be possible that HRA exemption has not provided by your employer due to non-submission of rent receipts. Don’t worry CAXPERT will help you to claim your HRA on genuine rent receipts at the time of filing income tax return.
Thirdly, the next step is to claim the deductions allowed under section 80C, 80D, 80G, etc. from your Gross Total Income. Again there might be a possibility that same deductions are allowed by all the employers in your Form 16s. Therefore to compute a correct taxable income and tax liability the benefit of deductions can be taken only once against your total income.
Fourthly, now calculate the total tax liability and deduct the TDS deducted by all the employers as mentioned in the Form 16 issued by them. You can also crosscheck the amount of TDS deducted by the employers in Form 26AS.
Case -2 Received only one Form 16 and not from the previous employer
When an employee has received only one Form 16, he can still file his return. CAXPERT will help you to file your taxes in such cases.
First, He can get details of the salary breakup and TDS deducted from the salary slips received from the employer for each month.
Secondly, He should aggregate his total income based on the salary slips of previous employer & Form 16 of current employer and should deduct allowances and perquisites exempted from tax.
Thirdly, claim the deductions allowed under section 80 from your Gross Total Income. Calculate the total tax liability and deduct the TDS deducted by the employers mentioned in the Form 16 or salary slips issued by them.
Fourthly, If any tax is still due, he should pay that through Self Assessment tax Challan (Challan/ITNS 280). He can also crosscheck the amount of TDS deducted with Form 26AS.
Case-3 Where he has not received Form 16 from any of the employers
In rarer cases where your employer did not provide you with a Form 16, don't fear; you can still e-File your returns yourself. CAXPERT can help you in this regard.
In this case He can still compute his Income & Tax liability without the Form-16. Here's how you do it:
- Collect your Salary-slips/payslips and figure out your Taxable Income
- Your Form 26-AS will help you to find the exact Tax Deducted at source (TDS).
- Claim your HRA – If you haven’t submitted the rent receipts to your employer, you can still claim it while filing ITR. If you not sure how to calculate HRA, just contact CAXPERT, our Tax Experts can help you out.
- Claim your Deductions u/s Section 80.
- Income from other sources – Any other income apart from salary e.g. Interest Income, rental income etc.
- Pay you Taxes (If any) through Challan 280 (Self Assessment Tax).
Finally, Enter your Challan details and File your Income Tax Return.
Therefore, once you have received the Form 16 from one or more employers or computed your tax liability by following the steps above, then get ready to file you taxes latest by 31st July.