HOW TO DEAL WITH FORM16 ? while switching your job

Anytime soon the employees would be handed Form 16 by their employers. Form 16 is a summary of the total amount (basic salary and other allowances) paid to the employee and the taxes deducted in the previous year i.e. the financial year 2016-17. This document will help an employee file the income tax return by 31st July, 2017.

But, what if an employee had switched jobs in the last FY and has more than one Form 16 from all employers or only from the current employer but not from other employer previous employers. Here's a step-wise approach to consolidate the numbers, under various circumstances.

When an employee has more than one Form 16, then tax computation should be made after considering every Form 16 document. As an employee one has to prepare a revised statement of income and revised tax liability to make sure that the tax is calculated as per the correct slab.
·         First, consolidate salary earned from all the employers for the financial year. 
·         Secondly, deduct the value of exempt allowances and perquisites for e.g. HRA, travel allowance etc. It may be possible that since you have not submitted the proof of rent receipts to the employer, so he may not have given you HRA exemption. But an employee can claim this while filing the return. 
·         Thirdly, claim the deductions allowed under section 80C, 80D, 80G etc. There may be a possibility that same deductions is allowed by all the employers in Form 16. But keep in mind that benefit of deductions can be taken only once against your total income. 
·         Fourthly, now calculate the tax liability and deduct the TDS deducted by all the employers mentioned in the Form 16 issued by them. You can also crosscheck the amount of TDS deducted with Form 26AS. 


When an employee has only one Form 16, he can still file his return. Here's how as per ClearTax.com. 


·         First, He can get details of the breakup of the salary and TDS deducted from the payslips received from the employer. 
·         Secondly, He should aggregate his total income and should deduct the exempt allowances and perquisites. 
·         Thirdly, Claim the deductions allowed under section 80C, 80D, 80G etc. Calculate the total tax liability and deduct the TDS deducted by the employers mentioned in the Form 16 or payslips issued by them. 
·         Fourthly, If any tax is still due, he should pay that. He can also crosscheck the amount of TDS deducted with Form 26AS.



Not received Form 16 from any of the employers .Although it is mandatory for the employer to issue the Form 16, one may still file the income tax return. Here's what Gupta suggests.

Your Form-16 is basically a TDS Certificate that lists your taxable income and TDS. You can still calculate that without the Form 16. Here's how: 

1. Collect your payslips and figure out your Taxable Income
2. Your tax credit / 26-AS will help you find the exact tax de ..
3. Renting? Don't lose out on HRA if you're eligible
4. Claim your deductions
5. Income from other sources
6. Pay additional tax if necessary
7. Finally, file your income tax return



 POSTED BY ,
SAKET KUMAR SINGH(Founder )
Lakshya Wealth Services

Comments

Post a Comment

Popular posts from this blog

Basic financial tasks to do when a parent dies

Step 1: Get multiple copies of death certificate This is the first and most crucial step since the death certificate will be required at all the financial institutions where you want to close accounts, transfer assets or investments, make a claim, or even sell the deceased’s assets. Remember to take adequate number of copies and get them attested, if required,” says Jayant Pai, Head, Marketing, PPFAS. “In case the death is in abnormal circumstances, obtain the relevant coroner’s report, autopsy report and a letter from the police station,” he adds. Every death needs to be reported and registered within 21 days in the prescribed reporting forms. If the parent passes away at the hospital, you will have to fill a form with details like the deceased’s name, age, father or mother’s name, address, etc. This is forwarded to the registration centre/zonal office of the local municipal body, from where the death certificate is issued in the specified time. For multiple copies, downl
Read more

on genuine investments there is no capital gains

The transactions recognised by SEBI will be out of the ambit of the new rule introduced this year in the budget that provides for the imposition of capital gains tax if securities transaction tax has not been paid. The final notification of the rule, which is in the works, will ensure that genuine investments such as employee stock options and off-market strategic acquisitions do not face tax. To shield exemptions for genuine cases in which STT could not have been paid, it was provided that the government would notify situations in which the rule would not apply. But CBDT issued draft notifications specifying situations in which it would apply. Though the first and third provisions addressed key concerns, the second one on listed stocks not purchased over the exchange left the issue open-ended. 
Read more

Last minute tips to crack your NCFM / NISM exam efficiently

In our earlier blogs , i have discussed a lot about the national stock exchange examination and its importance in career line of every finance aspirants and professional as well. Before coming to the tips, just understand what is national stock exchange certification in financial markets is. It is termed as NCFM in short and demanded by most of the financial company to their applicants and their employees to clear the levels as it will provide the road view of financial industry and its operations. NCFM exam has its three levels 1. Beginner 2. Intermediate 3. Advanced . All the  levels having different certification validity in which most are having the validity of 3 years from the date of passing the examination. When you create your id on nse website and register for a module , you will get the study material on your mail to study. Follow these tips to check before your exam. 1. Revise the overview of each chapter one day prior and on the day of exam 2. Collect your pho
Read more