Income Tax Archives -

9 Investments That Will Help You in Saving Income Tax

Mon, 10 Apr 2023 18:39:25 +0000

The Buyt Desk

Right Investment can help you in saving income tax under the Chapter VIA of the Income Tax Act. There are various deductions that can be claimed under Section 80C, Section 80CCC, 80CCD & Section 80D that will reduce your income tax obligation. But do watch out for associated risks and understand the returns.

If you’re a small investor, you must take into account the tax-saving investment that offers tax exemption benefits and helps in earning tax-free income. Start investment in the starting quarters of the financial year to sensibly plan and enjoy the maximum ROI (returns on investment) from numerous investment options.

Invest in tax-saving instruments

Tax calculations depend on what is submitted by an employee and then taxes are deducted accordingly. One can claim a duction of Rs 1.5 Lakh in a financial year by various investments under Section 80C of the Income Tax Act. An additional Rs 25,000 to 50,000 can be saved by buying health insurance.

Let’s look at some of the best tax-saving instrument options.

PPF (Public Provident Fund)

This is a long-term tax-saving investment option that helps investors to have a financial cushion after retirement. This scheme’s interest rate resets every quarter. All the contributions made towards this scheme, earned interest, and maturity proceeds, are tax exempted. PPF has 15 years maturity period with an extended duration of 5 years. A maximum of INR 1.5 lakhs can be claimed under section 80C of the Income Tax Act.

NPS (National Pension Scheme)

This scheme provides a pension to an investor from his or her retirement age. Investments made in this scheme are eligible for deduction under Income Tax Act’s Section 80CCD (1). A maximum deduction of INR 1.5 lakhs can be claimed. The minimum contribution amount is INR 500 while there is no maximum limit.

Equity Linked Savings Scheme (ELSS)

This is one of the common tax-saving investment options with three years lock-in period. One can get a maximum deduction of INR 1.5 lakhs. But, it is also one of the risky options because these mutual funds invest in equity and have market-associated returns earned. There is no maximum investment amount limit. Withdrawal is not possible before the successful completion of three years from the investment date.

Sukanya Samariddhi Account

This small deposit scheme is specifically launched for the girl child as the part of “Beti Bachao Beti Padhao” campaign with an 8% interest rate for the Apr-May-Jun 2023 quarter. The investments are eligible for tax exemption with the maximum amount of INR 1.5 lakhs under section 80C of the IT Act. The minimum investment amount is Rs. 250. The account can be opened after the girl child’s birth till she becomes 10 years old.

Unit Linked Insurance Plan (ULIP)

This is another tax-saving investment option that offers life insurance coverage as well as the advantages of investing equity. This is an insurance product with 5 year lock-in period and market-linked return earned. A candidate can withdraw the funds after expiring their lock-in period. The investment amount can vary based on numerous factors including the policy term, the candidate’s age, and the sum insured. The total premium paid should be less than Rs 2.5 lakh to gain tax exemptions on maturity.

Senior Citizen Saving Scheme (SCSS)

This scheme comes with a 5-years lock-in period and presently offers an 8.2% interest rate on the deposit which can be paid quarterly. The scheme can be further extended by 3 years. A senior citizen can make the maximum investment of INR 30 lakh and claim a deduction of up to INR 1.5 lakhs yearly under Section 80C.

Bank Fixed Deposit (FDs)

These are the security deposits much similar to other options of guaranteed return investment. The only differentiating factor is the tenure of investment applicable. Only 5-year tax-saving FD offers tax-free income. Hence, people with a low-risk appetite can invest in this option to save money over an extended period.

Insurance Policies

This investment option is recommended not just to save the tax but get excellent insurance coverage. Purchasing a life insurance policy provides great benefits on income taxability under sections 80C and 10(10D) of the Income Tax Act. Both premium paid and maturity proceeds towards the insurance policy are completely tax-exempted. A candidate can get tax exemptions with a maximum limit of INR 1.5 lakhs.

9. Health Insurance

Alongside the above-mentioned tax-saving investments beyond section 80C, there are some other investment options to save taxes. Health insurance premiums can also help with tax savings. Section 80D of the Income Tax saves your tax when you pay the health insurance premiums. An individual can get a deduction of up to INR 25,000 for their own, spouse, and children’s insurance premium. If you pay an insurance premium for parents aged less than 60 years then an additional deduction of Rs 25,00 is available. If self, spouse and parents are above 60 years of age then limit of deduction increases from Rs 25,000 t0 Rs 50,000.

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How to Take Maximum Benefit of All The Income Tax Deduction and Save More Tax?

Thu, 02 Jun 2022 17:32:21 +0000

The Buyt Desk

Not many know that there are other ways to get tax exemption other than section 80C of Income tax. The Income tax act has many provisions for tax exemption.

As you grow in your career and your earnings increase, your tax slab also increases. Every time you will be paying taxes higher than the previous year. Your tax liability increases year on year as you get promotions and increments. So you need to reduce tax burden by opting for some tax exemptions. There are many ways tax savings can be done. The Income tax act has described many exemptions under various sections. The one that many know is section 80C of income tax act. And there are many who think that this is the only section where taxpayers can save his/her money.

Under section 80C of the income tax act, one can get tax exemption up to Rs 150000/-. Similarly, of up to Rs 50,000 or more in some cases can be saved under section 80D by buying health insurance for self and family members. . Both individuals and HUFs can get benefits under 80C and 80D. Major tax-saving provisions for the common man are under 80C but there are other tax saving options besides Section 80C. Let us look at the alternative tax saving options other than Section 80C.

What are effective ways of saving Income Tax other than Section 80C?

Section 80D – Health insurance premiums

Taxpayers can save tax on the premiums paid towards health insurance. Even the amount spent on healthcare and medical treatments can get you tax deduction. The income that is spent on ensuring the health of taxpayers and his /her family can get a tax deduction under Section 80D, Section 80DD and Section 80DDB. The deduction amount may vary for every individual as the policy is bought. For taxpayers who are senior citizens, the limit is Rs 50000/- and for the rest, it is Rs 25000/- per annum. If a taxpayer is paying both his /her policy premium along with senior citizen parents, then he/ she can get a combined deduction of up to Rs 75,000/- per annum. When both the individual taxpayer and his /her parent are above 60 years old, the deduction up to Rs 1 lakh can be claimed.

Section 80E – Interest paid on education loans

Income tax is exempted on education loan interest paid. You can save tax when you go for an education loan for higher studies for yourself, your spouse or your kids. Section 80E of the Income-tax act permits individual taxpayers to avail of deduction. This benefit can be used either by the parent or kid, whoever is repaying the loan. But the education loan must be from registered financial institutions and not from friends and family.

Section 10(10D) – Payouts from life insurance plans

The amount of sum insured including any bonus that is paid on the death of the insured or on surrendering a policy or on the maturity of the policy is completely tax-free under Section 10(10D) of the Income Tax act. The nominee who receives the policy proceeds and sun assured need not have to pay tax for this amount received. As per Section 10(10D) of the Income Tax Act, 1961, the tax saving can be claimed on funds received through a life insurance plan, including maturity benefit, death benefit and the bonus received. But these have certain conditions to be fulfilled.

Section 80(G) – Donations and Charity

Tax exemption can be claimed on the donations made towards the National Relief Fund. Even charities made towards organizations for social causes can be claimed for tax benefits. The organizations receiving donations should be listed with the Ministry of Finance and have an 80G certificate, for the claims to be made. The purpose of the money is used by the organization to decide if the deductions will be allowed or not. For any claim above Rs 10000/-, the donation should be in the form of a cheque and not cash. Cash donations of only up to Rs 10000/- can be claimed. The citizens of India can save money on tax by claiming deductions for donations made under Section 80G of the Income Tax Act.

Section 80CCD – Investment in National Pension System

National Pension System (NPS) is where you invest in equity and debt pension funds to build a retirement corpus. One can withdraw funds from NPS only after retirement at age of 60. An amount of up to Rs 1.5 lakh deposited in an NPS account is tax exempted under Section 80CCD(1B) of Income Tax. This can be availed by all private and government employees, except for the armed forces.

Section 80GG – Rent paid

You can avail of tax deduction on your rent paid if you are salaried and have an HRA component by your employer. If there is no HRA component but you are still paying rent, the same can be claimed for tax deduction under Section 80GG up to Rs 60,000 per annum. This section can be utilized by self-employed and salaried workers who have no HRA component.

Section 24(b) – Interest paid on home loans

When you buy or build a house for self occupancy, you can avail of tax benefits on the interest paid on the home loan. You can claim tax deduction per annum up to Rs. 2 lakhs interest paid under section 24 of Income tax. And when the house is not for self occupancy, there is no limit on the deduction on the interest paid on the home loan. The principal paid towards the home loan is deductible under section 80C.

Section 80EEA – Interest paid on home loans by first time home buyers

Section 80 EEA under Income tax act, there is an extra benefit for first time home buyers. An additional deduction is available apart from section 24. An additional deduction up to Rs. 1.5 lakhs can be claimed under section 80 EEA. The only condition to avail of this benefit is that the property’s stamp duty value should not be more than Rs 45 lakh.

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High-Value Transaction Now on Income Tax Department Radar

Fri, 13 Aug 2021 05:32:30 +0000

The Buyt Desk

If you don’t want to face the heat of the income tax department, then be cautious of high-value transactions, especially cash transactions. The Income Tax Department is keeping a close eye on your high-value transactions. It has directed banks, intermediaries and other financial bodies to share details of all high-value transactions, and any failure in the same would attract penalties. There are six types of high-value transactions that taxpayers must be aware of to avert calling IT notice.

The Income Tax Department has created eleven categories of high-value transactions. We have simplified it to five major categories.

All cash deposits, FD, withdrawals of 10 Lakhs or above amount in a year in commercial and Cooperative banks.
The repayment of credit card in cash aggregating 1 Lakh or more and total of 10 Lakhs in a year made through different payment options cash, cheque and transfer.
Buying of shares, debentures, mutual fund, foreign exchange of currency of aggregated amount 10 Lakhs or more.
The purchase or sale of any immovable properties of 30 Lakhs or more.
Time deposit of 10 Lakhs and more amount in a year.
To avert receiving notice from the Income Tax department, the taxpayers must disclose all these high-value transactions in the ITR filing. Many taxpayers often do not disclose some information while filling the IT return. It often slips from the radar of the Income Tax department as it is hard to compile transaction data of such a large number of taxpayers.

How Income Tax Department Gets To Know About These Transactions

The institutions like banks, Registrar, companies, post office have been appointed as reporting authorities by the Income Tax department. These institutions will report all high-value transactions happening in their establishment to the director of Income Tax by filling the form 61 A. This form is also called the Statement of Financial Transaction. Via this form, the Income Tax Department investigation team gets to know about all high-value transactions. The department then verifies whether the taxpayer has shared details of these transactions in return on income or not. If the person has filed the return, then the disclosed income is correct or not, and the person has paid tax correctly or not.

The Income Tax Department is shaking hands with departments who could share the data of these transactions and have signed all memorandum and documents to work in coordination.

Final words – The Government of India is actively moving on digitalization and closely monitoring any malpractices followed to save tax. The taxpayer must keep themselves informed about these high-value transactions and file returns carefully to avoid facing the heat of the Income Tax Department.

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Do Minors Pay Income Tax?

Sat, 10 Jul 2021 04:14:55 +0000

The BuyT Desk

Yes, they do. The age of the income-earner doesn’t matter. A child is considered a minor until he is 18 years old and he/she is liable to pay income tax if they earn an income. A minor’s income is added to their parent’s income and they pay tax on it. A minor can earn income from a savings bank account, bank FD or any other form of investment made in his/her name. Parents of young children often make investments for their child’s higher education or their future. Grandparents make investments for minors. And sometimes the children earn money through their talent, like winning a competition or working in a reality show. All these earnings will be taxed.

How will it be taxed?

Earnings on investments made in the name of the children will be counted as the income of the parents. Under Income Tax Section 64(1A) the parent will have to pay tax on it. Parents will have to pay tax on whatever is earned. If both the parents earn then the child’s income will be clubbed with the parent whose income is higher. If the parents are divorced, then it will be added to the income of the one who has custody of the child. If the parents are not alive then the income of the child is not clubbed with anyone. The guardian doesn’t have to pay the minor’s tax. Instead, a separate income tax will have to be filed in the name of the child.

Tax exemption on the investment made for children

If the income from investments made in the name of the child is less than Rs 1,500, then it is not clubbed with the income of the parents. At the same time, when this income is clubbed with the parents, then the parents can claim an exemption of Rs 1,500 on the investment made in the name of each child.

Three Exception When A Child’s Income is not clubbed With Parents

1)If the child earns his/her own money based on his/her talent like winning a competition or appearing on a TV show or in any other way, then the child will have to pay a separate income tax. It is worth noting that you can also get a PAN card made for minors, which is considered necessary for filing returns.

2) In the case of an orphaned child his/her income is not clubbed with anyone. The guardian doesn’t have to pay the minor’s tax. Instead, a separate income tax will have to be filed in the name of the child.

3)Wherein, if the child is handicapped and has visual, hearing, walking or any mental illness as listed under section 80U of Income Tax, then their income will not be added to the income of the parents. A child is considered disabled when the minor has more than 40% disability due to mental illness, locomotor disability, hearing impairment, poor vision, and blindness.

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How to Save Your Income Tax?

Sun, 04 Jul 2021 06:37:52 +0000

The Buyt Desk

Have you invested in haste just before March-end to take a tax benefit under Section 80C of the Income Tax Act? Tax planning is crucial for finance management. Hasty investments can be a disaster. Spend time to understand different investments and tax-saving options before diving into one. You can save tax up to 1 lakh just by utilizing four sections of the IT Act – 80C, 80D, 80CCD (1B), and 24 (B). Here we discuss some of the tax-saving sections under the Act.

Section 80C

A commonly used tax saving option, Section 80C of the IT Act offers a maximum tax rebate of Rs.1.5 lakhs. The acceptable investments under this section are EPF, PPF, NPS, principal amount of a home loan, child’s school fees, and ELSS mutual funds.

Section 80CCD (1B)

In addition to creating a retirement fund, the National Pension Scheme (NPS) can provide a tax deduction of up to 2lakhs. An investment option for Section 80C, it also offers the additional tax rebate of Rs.50, 000 under Section 80CCD (1B).

Section 80D

The Government gives tax incentives to encourage you to adopt good financial management practices. It is best to buy insurance covers for protection against various calamities. As a nudge for buying health insurance, the Government allows Rs.25, 000 tax rebate against health insurance premium for self, spouse, or dependents. If you pay a health insurance premium for your senior citizen parents, you can avail an additional Rs.50, 000 tax rebate under Section 80D. When the taxpayer and the dependent parents are senior citizens, Section 80D can provide a maximum of Rs.1 lakh as a tax deduction in a year.

Now, you can even avail of Rs.50, 000 as a tax deduction under Section 80 D for medical bills of your senior citizen parents. However, it is possible only if they do not have health insurance.

Section 80E

If you are repaying an education loan, you can deduct the interest amount from the income in Section 80E. There is no upper limit assigned. You can take the deduction when you begin repaying the loan until the next eight financial years.

Section 24

The interest you pay on a home loan can be deducted from the income under Section 24. However, the property should be self-occupied. If you are paying interest on a home loan for a house under construction, you can avail of the tax deduction only after possession. A maximum rebate of Rs.2 lakhs is possible under Section 24.

Section 80EE

Being a first-time homeowner, you can avail of an additional tax rebate of Rs.50, 000 on the interest payment of a home loan under Section 80EE. This rebate is over and above the Rs.2 lakhs rebate under Section 24. The house’s worth should be less than Rs.50 lakhs for this rebate, and the loan amount should be Rs.35 lakhs or less.

Other sections of the IT Act, namely 80DDB, 80U, 80EEA, 80G, 80TTB, can also reduce your tax liabilities. We will discuss these sections in detail in another article.

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How to File Income Tax Return for a Deceased Person?

Thu, 24 Jun 2021 06:12:15 +0000

The Buyt Desk

The Income Tax Act dictates timely and accurate filing of ITR. Every now and then, the Government takes initiatives to encourage citizens to file ITR. For instance, section 139AA of IT Act mandates you to link the PAN card with the Aadhaar card, a measure for efficacious and mandatory ITR filing.

As per IT Department, the ITR for a departed person until his last day is also mandatory. The legal heir of the departed person becomes the tax assessee. He files an ITR and pays tax on the behalf of the dead person. In case the legal heir does not file the ITR, the IT Department proceeds in the same manner as when a living person fails to file his ITR. This means as the legal heir, if you do not file the ITR calculating the tax until his last day, you will be liable to pay penalty, interest, and late fee along with the impending tax.

What are the requirements to register as a legal heir for a deceased person?

Before registration as a legal heir, you should have the following information at hand:

Login details of your account on the IT Department e-filing website
Demographic and personal details of the departed person
His PAN card number and the bank account details

Steps to register as the legal heir for a deceased person

Before you can assess tax, file ITR, and pay tax for the deceased person, register as their legal heir online.

Login https://www.incometax.gov.in/iec/foportal/ with your credentials.
Go to “My Account”.
Then go to “New Request”. Here, you can register as the legal heir for the deceased person. Click on “Register on behalf of the deceased” and proceed.
Fill the personal information, PAN card and bank account details of the departed person.
Once the request is approved, you will receive a SMS on the registered mobile phone.

The Process of filing the ITR for a deceased person

After registration, you have to submit the ITR just as you do it for yourself. Download the suitable ITR form from the IT e-filing website. Fill the form with personal, income, bank, interest, tax assessment and other information of the deceased person. Generate the XML file for the form and upload on the website. Digitally sign the form and submit it.

How to calculate Income Tax for a deceased person?

The process of calculating the income of the deceased person is the same as any other person. The differentiating factor is the period for which the tax is calculated. For a person who is no more, the tax is calculated only until the date he was alive, instead of the complete year.

In most cases, the legal heir is unaware of the responsibility to file ITR for a deceased person. Moreover, earlier the process for such a ITR was unclear. Filing a tax return in the name of a person, who has passed away, is not correct. Above described process is the right way to fill Income Tax Return for a deceased person.

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New Income Tax Promises to Make Taxpayer’s Life Easy

Tue, 08 Jun 2021 05:59:05 +0000

The Buyt Desk

The e-filing portal of the Income Tax Department is undertaking a facelift. This will bring ease to the process of filing returns. The new name of the website will be www.incometax.gov.in. Earlier it had a longer name with the word e-filing in the name but now it will be a shorter name with a promise of user-friendly features. The new website will help taxpayers in assessing their income, due tax and any refund if liable with much ease than before. This is just the beginning. The income tax department is all set to launch a mobile app as well so that income tax payment is just one click away.

Here are 8 things that will change for Income Tax payers with the new website –

The dashboard will have all the information regarding your profile like all uploads, pending actions so that users can follow it up easily without getting lost in the website.
Free of cost ITR software for filing Income Tax Return for ITR-1, 2 and 4. There will be a series of interactive questions that will help taxpayers in filing their return. Soon this facility will be provided for other return forms like ITR 3,5, 6 and 7 also.
The ITR will be processed immediately and a refund will be initiated within days.
Taxpayers will be able to pay their taxes as well through the new website.
Taxpayers will be provided with pre-filled ITR with information such as income from salary, interest, dividend and capital gain from shares. The taxpayers will also be able to update information related to salary, property, business etc. This facility will be available after the uploading of TDS and SFT statements, the last date of which is 30 June 2021.
A call centre will be set up to address the grievances of the taxpayers so that their problems will be resolved at the earliest.
There will be video tutorials and chatbot to help taxpayers understand the processes.
Taxpayers will also be able to reply to the notice through this portal and will also be able to appeal.

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Income Tax Due Date Extended for Financial Year 2020-21

Fri, 21 May 2021 09:36:11 +0000

The Buyt Desk

Income Tax return filing gets an extension of 2 months. The severe second wave of COVID-19 has been the reason behind this move. To provide relief to taxpayers they can file their income tax return for the financial year 2020-21 till 30th September 2021. The last date was 31st July which has now moved further by two months. Apart from the return filing extension, there have been many changes in various tax compliances to ease the stress on common taxpayers.

Here are the 7 new extended deadlines to file your income tax returns

1)For the financial Year 2020-21 for which the assessment year is 2021-22 tax return can be filed till 30th September. The taxpayers whose accounts are not audited and usually file their return in form ITR-1 and ITR-4 will benefit from this extension.

2)The companies and firms whose accounts are audited are also allowed for an extension. Earlier they had to file their return by 31st October but now they have time until 30th November.

3) Central Board of Direct taxes has given an extra time of one month to companies to furnish the Form-16 to its employees by 15th July 2021. The companies are required to give this by 15th June of every year but now there is a relaxation of one month.

4) Those who have to file a tax audit report as well as the transfer pricing certificate gets a date extension by a month and can do so till 31 st October and 30th November, respectively.

5) The dates for filing belated or revised return has been also pushed by a month to 31st January 2022, from 31st December 2021.

6) The financial institutions have also seen an extension of the deadline for furnishing the Statement of Financial Transaction or SFT report. It is extended till June 30, 2021, from May 31, 2021.

7) The Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21 which is required to be furnished on or before 31st May 2021 can now be furnished on or before 30th June 2021.

The government has already notified the income tax return forms for the financial year 2020-21 on 1st April itself. These forms are pretty much the same as the last year. The Central Board of Direct Taxes has ensured that the process of return filing remains easy in pandemic times and that is why there have been no significant changes in the return form as compared to the last year’s ITR forms.

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Income Tax Return Deadline Reduced by 3 Months

Sun, 07 Mar 2021 14:31:23 +0000

The BuyT Desk

From Financial Year 2020-21 the last date for filing your belated and revised income tax return will be 31st December. Till now, a full financial year was available for filing returns and one could file the late return till the end of the next financial year i.e by 31st March. Usually, returns have to be filed by 31st July of every year. After this, the taxpayer had time until 31 March of the next financial year to file late and revised returns with a penalty. But Budget 2021-22 changed this. Finance Minister Nirmala Sitharaman reduced the deadline by three months. Now, a taxpayer must file his/her late and revised return by December 31.

What are belated and revised returns?

When the last date for filing the IT Return is missed, you file a belated return with a penalty. If there is a mistake from the taxpayer in filing the return, such as wrong calculation, forgetting any income or investment, giving wrong bank account details – to rectify them, the taxpayer files the revised return.

Why was the deadline shortened?

The government has taken several steps to make the process of filing IT Return easy. With the upgrade of technology, a large number of taxpayers are getting pre-filled return forms. Soon the pre-filled return forms will have the details about the capital gain as well. There is more ease in filing return as taxpayers will have much information in their hands now thus making return filing easy.

What if I miss the deadline?

If you do not file your income tax return by the date prescribed by the IT department, then you can get a notice and you will have to pay tax with a penalty if there is outstanding tax. However, if you are unable to file the return due to an unforeseen situation that could not be avoided, then you can file the Condonation of Delay under Section 119 (2) (b) of the Income Tax and request the IT department to allow you to file delayed return. You must have a valid reason for not filing your IT return on time or else you may just lose the chance of filing your return.

Why is it important to file your return?

An income Tax return is an important official document that is required in many important places. Like at the time of visa application, passport and loan application. So it’s important to file it on time and keep a record of the same. Now since you will have less time to file your IT return you must adhere to the new deadline and finish it timely

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Changed Job In A Year- What Should You Keep In Mind From The Point Of View Of Income Tax?

Wed, 09 Dec 2020 10:10:55 +0000

By CA Gauri Chadha

Amit changed his job and shifted to a new company at a higher salary. With hiked salary came an increased tax liability too. But it was not just due to the pay hike. Amit’s tax calculation went up because he was not careful about the job transition and did not work out the tax handover properly.

Why Amit’s tax liability increased? Here is what happened?

Amit did not provide his last salary and TDS details to the new employer. While calculating the tax, the new employer considered the standard deduction and exemption limit. But the previous employer had already granted these two exemptions. At the same time tax deduction like 80C also got counted twice. Double calculations led to inaccurate tax computation.

Don’t forget to fill Form 12B when you switch job.

Changing jobs during the financial year can make things complicated from the income tax point of view. Usually, when people change job, the employee needs to give the details of his old salary details to its new employer in Form 12B. This form contains information like employers’ PAN and TAN details, and salary paid, the tax deducted, etc. Based on the information of this form, the new employer will work out tax liabilities for the remaining months of the financial year.

Another advantage is that you will get a consolidated Form 16 from your current employer. In the case you don’t submit these details, both your past and the present employer will give you Form 16.

Your previous employer can give you a Form 12B or you can download the form from the official website of the income tax and fill it up looking at your salary slip.

Sometimes employees don’t want to disclose earlier salary to a new employer. Therefore do not wish to submit form 12B in such cases it is advisable that the employee calculates the tax payable himself and meet the shortfall by paying advance tax to avoid penal interest. In such cases, the employee can easily file the returns without much hassle.

But if the employee forgets to disclose previous salary details to the new employer and as a result while filing the return, there is an outstanding tax payable such tax will be paid along with penal interest if any.

Such tax payable is due to quite a few reasons, mostly because both the employers give the benefit of basic exemption limit, slab rate benefit, standard deduction etc.

So while filing the returns in such a case firstly you need to check the Form 16 issued by the new employer and be sure that previous employer’s salary is also duly incorporated. If such Form 16 does not include previous employer’s salary, then you will have to collect form 16 of the prior employer as well and include both the form 16s in return, without claiming any benefit twice.

To be sure that the employers have deducted and deposited the TDS, employees need to check their form 26AS. Form 26AS is a consolidated statement that consolidates taxes paid on your behalf by all employers and advance tax, self-assessment tax paid by employee etc.

If there is any discrepancy between your form 16 and form 26AS, the same needs to be brought to employer’s notice since there if you will file your return in such a situation you will get a notice from the department. You must file the return once the deductor has corrected the entries.

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