Filing Income Tax Returns (ITR) is a crucial responsibility for taxpayers in India, ensuring compliance with tax laws and availing refunds for excess taxes paid. Form 16, issued by employers, is one of the essential documents for salaried individuals during ITR filing.
However, many taxpayers encounter the scenario of having multiple Form 16s due to changing jobs within a financial year, leading to confusion about how to accurately file their ITR.
This blog will guide you through the process of filing ITR with multiple Form 16s, addressing common concerns and simplifying the procedure.
Understanding Form 16
Form 16 is a crucial document issued by an employer to the salaried employees that contains the details of the salary paid and the tax deducted at source (TDS) from your salary during the financial year. Form 16 is important for filing your ITR.
As per the Income Tax, TDS certificate aka Form 16 must be issued by your employer once in a year, on or before 15th June of the assessment year followed by the financial year in which the tax is deducted.
Components of Form 16
Part A: Contains details of the employer (name, address, PAN, TAN) and employee (name, PAN), period of employment, and summary of TDS deposited.
Part B: Provides a detailed breakup of salary, various deductions under Chapter VI-A (such as Section 80C, 80D, etc.), taxable income, and TDS.
Click here to download Form 16, Part A and Part B.
Why Might You Have Multiple Form 16s?
- Changing Jobs: When you switch jobs during a financial year, each employer issues a separate Form 16 for the period you were employed with them.
- Working Part-Time or Freelancing: If you work with multiple employers or have freelance income, each employer/client may provide a separate Form 16.
Steps to File ITR with Multiple Form 16
Step 1: Collect All Form 16s
Ensure you have Form 16 from each of your employers. This document is typically provided around May or June for the previous financial year. If you haven’t received it, request it from your employers.
Step 2: Consolidate Salary Details
Combine the salary details from all Form 16s to get the total salary received during the financial year.
Employer | Salary Income (₹) | TDS Deducted (₹) |
Employer 1 | 5,00,000 | 50,000 |
Employer 2 | 3,00,000 | 30,000 |
Employer 3 | 2,00,000 | 20,000 |
Total | 10,00,000 | 1,00,000 |
Step 3: Calculate Total Taxable Income
Add any other income sources such as interest from savings accounts, fixed deposits, rental income, etc., to the consolidated salary.
Example:
Salary Income: ₹10,00,000
Interest Income: ₹20,000
Total Taxable Income: ₹10,20,000
Step 4: Compute Total TDS
Sum up the TDS from all Form 16s and any other TDS certificates (e.g., from bank interest).
Source | TDS Deducted (₹) |
Employer 1 | 50,000 |
Employer 2 | 30,000 |
Employer 3 | 20,000 |
Bank (Interest) | 2,000 |
Total | 1,02,000 |
Step 5: Determine Tax Payable or Refundable
Using the total taxable income and total TDS, compute the final tax liability. Refer to the income tax slabs applicable for the financial year to determine the tax payable.
Example Calculation:
Total Taxable Income: ₹10,20,000
Tax Payable (as per slabs): ₹1,10,000
TDS Deducted: ₹1,02,000
Tax Payable/Refundable: ₹8,000 (Payable)
Step 6: Filing the ITR Online
Register/Login on the Income Tax Department’s e-filing portal: e-filing portal
Select the appropriate ITR form: Generally, ITR-1 for salaried individuals.
Enter personal details and upload Form 16: The portal allows you to upload Form 16 for auto-populating certain fields.
Fill in Income Details: Manually enter or verify the consolidated salary and other income details.
Claim Deductions: Enter deductions under Chapter VI-A (e.g., Section 80C, 80D).
Verify Tax Payable: Cross-check the tax computation with your calculations.
Pay Additional Tax (if any): Use net banking or other payment methods.
Submit and e-Verify the return: Use Aadhaar OTP, Net Banking, or other methods for e-verification.
Common Mistakes to Avoid
Incorrectly Consolidating Income: Ensure all income sources are included to avoid discrepancies.
Mismatch in TDS Details: Verify TDS details with Form 26AS to ensure accuracy.
Not Including Previous Employer Details: Always include income from all employers during the financial year.
Tips for a Smooth Filing Process
- Using ITR Filing Software: Consider using online tools or software to simplify the process and reduce errors.
- Double-Checking Information: Review all entries before submission to ensure accuracy.
Keeping Documents Handy: Have all necessary documents (Form 16s, Form 26AS, other income proofs) ready before starting.
What to Do if Your Previous Employer Hasn't Issued Form 16?
If your previous employer has not issued Form 16, you can still file your ITR by using your salary slips and Form 26AS.
How to file ITR without Form 16?
- Calculate the breakup of the salary and deductions: Use the payslips provided by the last employer.
- Consolidate the income earned: Deduct any exemptions such as travel allowance, house rent allowance, etc.
- Claim deductions for investments: Made under Sections 80C to 80U.
- Calculate the total tax liability: Deduct the amount of TDS that has been paid by employers.
- Cross-check with Form 26AS: Ensure all TDS is reflected correctly.
Frequently Asked Questions (FAQs)
Q: What is Form 16?
A: Form 16 is a certificate issued by an employer to its employees that contains details of the salary earned by the employee during the financial year and the tax deducted at source (TDS) on that salary.
Q: Why would someone have multiple Form 16s?
A: It is possible to have multiple Form 16s if an individual has worked for more than one employer during a financial year or if they have changed jobs during that period.
Q: Can I file my income tax return with multiple Form 16s offline?
A: Currently, the Income Tax Department requires individuals to file their income tax returns electronically. Offline filing options are no longer available for most individuals.
Q: What if there are discrepancies or errors in the Form 16s?
A: If you notice any discrepancies or errors in the Form 16s issued by your employers, you should contact them to rectify the issues and obtain corrected forms. It is important to ensure that the details mentioned in Form 16s are accurate before filing your income tax return.
Q: What if I have any additional sources of income apart from my salary?
A: If you have additional sources of income, such as income from house property, capital gains, or other investments, you need to consider those sources and calculate your total income accordingly. The income from different sources must be reported and included in your income tax return.
Q: Should I keep a copy of all the Form 16s for future reference?
A: Yes, keeping a copy of all the Form 16s issued by your employers for future reference is advisable. These documents serve as proof of income and tax deducted at source and may be required for various purposes, such as loan applications or verification during income tax assessments.
To Wrap it Up!
Filing ITR with multiple Form 16s can be straightforward if you understand the steps involved. Use Form 12B to inform your current employer about previous income and investments, which can simplify the consolidation of salaries and TDS.
In cases where Form 16 is not provided, salary slips and Form 26AS can help you accurately calculate and file your ITR. Proper planning and following the outlined steps will ensure a smooth ITR filing process.
Need assistance in ITR filing? Let us help you with our online ITR filing services.
