Things to consider when submitting a return after a job change

K. ARAVIND

Those who have worked for two companies in a financial year need to ensure that the information provided when filing an income tax return is accurate. In such a case you will get two Form 16s. It is not enough to automatically record the information in them on the return.

If both employers who worked in the same fiscal year provided the same information about the deposits and did not provide the new employer with the salary details of the old company, the information on Form 16 that you pay tax may not be accurate. In that case you have to re-determine the tax on your own. Since both employers do not have complete information about your income, it is possible that the tax deduction will be calculated twice.

Discounts on HRA and LTA are calculated based on the length of time you have worked, so there is no risk of error. At the same time, exemptions under Section 80C of the Income Tax Act and concessions for deposits and interest on home loans are likely to be repeated. So both employers may have underestimated the tax you owe and withheld less tax than you actually owed as TDS. In this case, you have to pay the remaining tax on your own. For late payment of tax, interest is payable at the rate of one per cent per month.

If the tax deduction documents are not submitted on time, the employer may levy additional tax as TDS. Failure to submit the tax exemption documents such as lease agreement and receipt for HRA may result in loss of that exemption. In such cases the tax deduction for HRA can be claimed directly at the time of filing the income tax return. This will help you to get extra tax refund.

TDS will be levied if the deposit in the Employees Provident Fund (EPF) is withdrawn before the completion of five consecutive years of service. If the withdrawal amount is above Rs.50,000, 10 per cent TDS will be levied. TDS is not applicable if you have worked for more than five years. The old EPF investment period will also be considered for tax deduction only if the EPF under the old employer is not withdrawn and transferred to the EPF account under the new employer. For example, suppose you have completed four years under the old employer and one year under the new employer. TDS can be waived when the old EPF balance is transferred to the new account. Failure to do so will result in TDS being deducted from the balance of both the accounts.