Professionals are always on a lookout for a better job and growth. A sudden change in a job should be well accounted for. It is just not possible to plan your ITR filing before the financial year marks an end. So if you have or planning to change your job, then hold your horses and get all your required information from our article.
What is the process for Income Tax Filing?
As and when you officially join a company, you’re handed out Form 12B. This document needs to be clearly filled with your PAN card, previously paid salary, tax deductions and tax saver investments planned for the full year.
You can easily go back to your old salary slips and check for all missing information. You can also check your Form 26AS submitted online for the tax deductions and actual income.
A quick sequence of steps can be viewed as under:
- i) Log into the TRACES portal OR
The Income Tax e-filing website OR
Select the ‘View Tax Credit Statement’ option from the Netbanking option
If your working tenure has been short, then it’s likely that a small amount has been deducted from your salary or you fall into a lower tax slab. It is also likely that you are exempt with a taxable bracket below 2.5 lacs. Generally, employers doubly calculate the minimum exemption limit, HRA exemption, LTA and other tax deductions which can totally corrupt calculations. This mostly happens when employers miss or copy incorrect values for totaling up for taxation.
After filling up a Form 12B, it gives clarity on the new employee’s taxable income and investments. This enables the new employer to analyze your total tax liability for a consolidated Form 16 of the current assessment year.
Important factors to keep in mind also:
- Form 12B is not mandatory
If you are not comfortable to present tax or salary details of your previous job, then don’t! Your new employer will base its taxation on the current salary, where the tax amount will be much lower.
This can create issues when you’re filing tax towards the end of the year. Firstly, there would be an additional tax, along with an interest component on the outstanding payable tax under Section 234B and 234C if at all no advance taxes were previously paid.
Read More: Top 5 Tax Savers Schemes
Reporting of other/exempt income
When you have additional income from other sources, like interest on savings or fixed deposits, then you can either report it to your employer for deduction or file it separately when actual income tax filing is done.
For amounts (PF or gratuity) which are tax-exempt must be clearly mentioned in the ITR form under exempt income.
Read More: Understanding TDS: You Earn after Losing
How to check Form 26AS for Tax Filing?
Form 26AS is a document that merges taxes paid on your behalf – like tax deducted on salary from all employers including income from consulting, commissions, interest from FDs, so on and so forth.
If at all, there’s a discrepancy found between Foran 16 and Form 26AS, intimate the source of information to get them rectified at the earliest.