Complexity With Two Form 16

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Complexity With Two Form 16’s

Written by Gagandeep Arora - Printed on - Date - 8th July 2022

Form 16 is a mandatory certificate to be provided by the employer to the employee. It acts as proof of timely tax payments. It also shows how your taxes have been calculated depending on the declarations made at the beginning of the year regarding allowances like house rent or medical bills. A salaried employee is eligible to Form 16 if your employer has deducted tax at source even if you fall within the tax exemption limit. Life provides many opportunities and could lead a person to change his employment in a financial year or is doing multiple jobs then in that case an employee needs to understand the procedure of filing the income tax returns. As the case may be both the employers will issue Form 16 to the employee. Let us know the filing of an Income-tax return to clarify the confusion.

Procedure For Filing Return With Two Form 16’s

An assessee while filing the return with multiple form 16’s should keep in mind that you need to follow the old tax regime while filing your return. Under the new tax regime, you will not be eligible for tax exemptions and deductions. The taxable liability will be calculated on the total taxable amount where no deductions have been calculated. Form 16 comprises two parts namely Part A and Part B.

What do Part A and Part B in Form 16 State?

A salaried person whose tax has been deducted by the employer is eligible to get Form 16, it does not matter if your income falls under the tax exemption limit or not. The form is divided into two parts.

What do Part A in Form 16 State?

Part A is issued by the employer. The details to be given under this part are PAN and TAN of the employer, PAN details of the employee, employer's name and address, and tax deducted and deposited quarterly. This certificate is not issued by the employer but by financial institutions or entities who have deducted tax at source on your income other than your salary. For example interest on your fixed deposits, income from rent or commissions etc.

What do Part B in Form 16 State?

Part B is an annexure to Part A. The details required to be given under this part are relief under section 89, detailed breakup of salary, and deductions allowed under the IT act. This certificate is issued for tax deducted at the source of income earned through the sale of immovable property. The buyer must deduct 1% of the sale value as TDS and submit it to the income tax authorities.

The employer is required to issue Form 16 on or before 31 May of the assessment year which gives a taxpayer sufficient time to prepare before filing a tax return.

What Things Need To Be Clubbed From Both Forms?

When an assessee works under two different employers in the financial year than in that case to file ITR one needs to consolidate the total number for each head to know the gross salary earned during the financial year from all the employers. Along with that, you are required to calculate the amount of exemption you can claim from your salary income only like HRA and LTA. These amount of exemptions need to be clubbed together.

Further claim deductions under sections 80C and 80D can be claimed also only once as per Income Tax laws even if mentioned in both the forms. A salaried individual can claim a standard deduction of Rs.50,000 from salary income but only once even if it is mentioned in Part B of both the Form 16s. The maximum deduction amount is Rs.50,000 and not Rs. 1,00,000 after the computation of gross salary a standard deduction of Rs. 50,000 can be availed by the assessee.

Is Form16 given from only your current employer?

In case an employee has received Form 16 from only your current employer then two things are required to file the ITR, salary slips from the previous employer and the break up of the salary as required in the ITR form. These two things will help in the computation of the total gross salary from which deductions can be claimed to get to the net taxable salary.

If Form 16 is not received from an employer?

An employer must issue Form 16 in case tax is deducted at the source. An employee can request his employer to issue Form 16. An individual can countercheck also with the help of Form 26 AS whether the employer has deducted tax at source, In case of failure of the employer to submit the tax then the liability to pay your tax lies with the assessee himself, which he can claim later by his employer. In case the employer has not issued Form 16, then also you should file your tax return and claim it later.