How to E-File Your Tax If You Have Changed Jobs?

You may have your own reasons of switching jobs in career’s journey. But if you change employment in middle of a financial year, then take into account the tax liability that comes along. Your income tax liability is calculated on the basis of salary paid by all your employers in the particular financial year. It is mandatory to disclose your income from every employer in a relevant FY you file the income tax return in.

Ideally, when you join a new employer, you have to declare the previous income details in Form 12B. The new employer has to consider the past income details and deduct suitable taxes when issuing a consolidated Form 16. The form must contain details of your current income, salary from previous employment, and Tax Deducted at Source (TDS). You have to submit Form 16 when filing for your income tax return.

In this post, we will discuss about the role of Form 16 and Form 26AS in e-filing income tax, effect of Provident Fund on income tax, how to e-file Your Income Tax, and frequently asked questions.

Role of Form 16 and Form 26AS

Form 16 is issued by the employer states how much salary has been paid to the employee in a specific financial year. You may have multiple Form 16s if you switch job for more than once in a financial year. Before you quit a company, ensure you get the Form 16. If you do not receive the same, do not worry, but follow the below mentioned steps:

  • To account for income tax, you need to collect various Form 16s from the previous employers stating your salary which will help arrive at your annual salary earned.
  • To substitute the process, you can also calculate the total salary by adding up the amount of credited salary from the salary slips or statements.
  • Now, another concept is Form 26AS which depicts the amount of TDS pertaining to your salary.
  • This TDS amount needs to be deposited with Income Tax Department (ITD) by the employer.
  • You need to check if the amount paid by the employer is matching with the data on official website of ITD or not.

Effect of Provident Fund (PF) on Income Tax

Every month, a portion of your salary is transferred to PF account and similarly the employer makes a specific contribution to that account. You can either choose to withdraw money from your EPF account or transfer it to next employer. Withdrawing PF amount up to 5 years may result in taxation of that amount. To transfer the account from existing employer to another, Form 19 and Form 10C need to be filled.

How to e-file Your Income Tax?

It is possible that less tax was deducted if you had worked with previous firm for a short time. This is more likely if your taxable income was exempt if less than Rs. 2.5 lakhs or from a lower tax slab. For accurate tax liability calculation, you must also disclose tax exemption, investments, savings accounts and fixed deposits interest earning, income from other sources, and standard deductions.

You can check your older salary slips for income calculation for the year. You may even check Form 26AS online from TRACES portal of e-filing website of ITD. You can even select ‘View Tax Credit Statement’ from your bank’s net banking platform. Form 26AS included tax deduction on salary from all employers, and income from commissions, consulting, FD interest, etc.

Here are the steps to e-file your income tax if you have changed jobs in a financial year:

  • Get your latest Form 16. This will contain details of the salary you have received from your previous and current employer.
  • It will also consist of information about taxable salary from your employers.
  • After filling the ITR form, generate an XML file, and save on your system. Login to e-filing website for tax return.
  • Click ‘e-File’ menu. Click ‘Income Tax Return’. After the PAN is populated, select ITR Form number, assessment year, and filing type as revised/original.
  • Select the submission mode – prepare and submit online. Click ‘Continue’.
  • Fill the ITR form, especially all the mandatory fields.
  • To generate an acknowledgement ITR-V, upload the XML file from the system. Now upload the latest Form 16 from the current employer, tax saving investment proof, etc.
  • In the section ‘Income Sources’, minus the received salary from past employer from the total amount. The difference or the remaining amount is the salary you received from your current employer.
  • Click ‘Add Another Salary’.
  • Enter information of salary from previous employer, and press ‘Save’.
  • Choose suitable verification option under the tab ‘Taxes Paid and Verification’.
  • Pick either ‘I would like to e-verify’ or ‘I would like to e-verify later within 120 days from the date of filing’.
  • Click ‘Preview and Submit’ button. Check the information entered in the Income Tax Return, and submit it.
  • If you select the option ‘I would like to e-verify’ option then you can do the online verification through Aadhaar OTP, EVC, pre-validated Demat account, pre-validated bank account, or digital signature certificate.

Frequently Asked Questions about e-Filing Income Tax on Switching Jobs

Here are the FAQs:

Every year the Tax Department releases different ITR forms. You must select an appropriate one based on the types of income you earn in a financial year. If you have worked with more than one employer in an FY, then you have to account total salary from all the employers and submit in a respective schedule. You also have to mention TDS deducted by every employer in the TDS schedule with employers’ TAN details.

If you do not submit previous employment and income details to the new employer, then when filing your income tax return, consider both the Form 16s. You may have to pay self-assessment tax in case the tax exemption limit is taken into account by the past and new employer. At the time of remitting tax, ensure to select the right assessment year and tax chalan.

If you switch jobs in middle of a financial year, claim exemptions/deductions on tax only once. You need to maintain the relevant proof in case of a future enquiry by the ITD.

If you have a personal income such as rental income, interest on bank accounts, fixed deposits, etc, then let your employer know about it. This will be helpful for the employer to deduct suitable tax. So, when reporting personal income for IT return, these details must reflect properly in Form 26AS. Similarly, disclose in income tax return the exempted income from previous employer/s. For instance, withdrawal of gratuity, provident fund, and more.

The Form 26AS contains details of all the taxes you have paid and deposited on behalf of the deductor to the Indian Revenue Authorities. Basically, it is a complete annual tax statement. Thus, you must verify and review this form to ensure all the information in income and taxes are accurate. This detail is considered when filing the IT return.

If you have changed job from a foreign country to India, then you will be accounted as ‘Resident and Ordinarily Resident’ in a particular financial year. In this case, you must report in the ITR the foreign assets such as immovable properties, bank accounts, financial interests, etc abroad. This will allow you to avoid repercussions under the Black Money Act.

If there is mismatch of details in Form 16 and Form 26AS, you need to inform the respective employer and take measures to correct the information.

The Indian Revenue Authorities has inserted new schedule in ITR Form ‘Assets and Liabilities Schedule’. This is applicable when total income in a tax assessment year exceeds Rs. 50,00,000. So, go through the income details and disclose it accurately in this schedule if the income is above the mentioned limit.