Suchitra is a doctor by profession and has been working for a renowned hospital in Chennai. Post her marriage last year, she decided to switch working for a hospital in Hyderabad. Salary was her main source of income apart from interest on FDs and hence she has always filed her ITR through an online portal. Switch in jobs in the previous year resulted in Suchitra having the “double Form 16 syndrome”! She realised that her deductions were considered by both employers. Will filing through an online portal help in her case?
Double Form 16 Syndrome
When you switch jobs during a financial year, if the salary from previous employer is not declared to your current employer, your deductions may be double counted for TDS calculations.
For example, a salaried individual is eligible to claim a standard deduction of Rs 50K (old regime – FY 2022-23) in his / her ITR. In the absence of information to the second employer, both the employers will consider Rs. 50K in the respective Form 16 issued and hence the TDS deducted would be lower.
Let’s assume some numbers in Suchitra’s case
| DETAILS | FORM 16 EMPLOYER 1 | FORM16 EMPLOYER 2 | ITR |
| Gross Salary after deductions | 25,00,000 | 15,00,000 | 40,00,000 |
| Less: Standard Deduction u/s 16 | (50,000) | (50,000) | (50,000) |
| Income From Salaries | 24,50,000 | 14,50,000 | 39,50,000 |
| Income Tax on Salaries (incl Cess) | 5,82,400 | 2,70,400 | 10,50,400 |
| Less: TDS deducted by employer | 5,82,400 | 2,70,400 | 8,52,400 |
| Balance Tax payable | 1,97,600 |
Hobson’s choice !
Additional Tax liability with interest and penalty for Suchitra could be much more than the number in the table. No one likes the cash outflow especially if it’s for tax payment. But what are the alternatives?
Let’s put it this way – what are the consequences if Suchitra does not declare one Form 16 in her ITR? This would obviously be the first choice any one of us would think of. It’s like trying to close your eyes and wish the problem to vanish away.
But let’s take the worst case scenario – Bothe employers have deducted TDS and have declared the same and hence there is a high possibility of Suchitra receiving a notice from the Taxman asking her to pay up her taxes with interest and penalty.
Hence Suchitra must be prudent and declare both Form 16 and meet the tax liability.
How can we help you?
Various clauses from the Income Tax Act may be simplified in online contents. But most of the time, it requires professional help in identifying suitable route for specific instances. Similar to nurturing and taking care of personal health, it is important to also keep a tab on one’s financial health. We at Chockalingam Unnamalai & Associates, can help you understand the pros and cons of various choices you make in the context of personal taxation. You can bank on us for a stress free tax filing and related compliances.
Call us at +91 73050 56628 or drop a mail to frontoffice@onesourcevault.com
ITR Filing – Why choose us?
Effective compliance is a key pillar for growing your finances and career/business. Tax compliance in particular could be cumbersome and at times very stressful. We help you to navigate through the maze of changes to tax laws with ease.
We understand and operate on the principle – “Time is money”. We have a reasonable turnaround time (TAT) which ensures timely tax compliance.
We understand the importance of data security and hence operate in a data-secure environment. Onboard us and experience certainty and value for money!
