When you switch jobs between two companies in a financial year (FY) in India, it can have an impact on your income tax.
Here are key points to consider:
- After deducting the Basic tax exemption amount of Rs. 2,50,000 and the standard deduction, each employer would have deducted tax based on the income earned with them; however, the cumulative income would be taken into account for tax computation at the end of the financial year, and Basic exemption and standard deduction would only be allowed once.
- In order to avoid this error, you can declare your previous employer income with new employer this helps you to pay right amount tax in the form of TDS.
what happens if you fail to declare your previous employer salary with current employer?
- You need to provide details of income earned from both employers while filing your tax return for the financial year.
- The tax liability would depend on your total income for the year, which would include income from both employers, as well as any other sources.
- The income tax slab rates would apply on the total income, and you may be eligible for tax rebates or deductions based on certain investments or expenses.
- It’s important to ensure that you have all the necessary documents such as salary slips, Form 16, and bank statements to accurately calculate your total income.
- Since you failed to declare the previous employer income, your present employer will deduct your taxes at lower rate, this will result to short fall in payment of advance tax, so since there is a shortfall and delay in payment of taxes you will have to pay tax along with Interest under section 234B and 234C of income tax act 1961 at the time of filing your tax return
Don’t freak out despite the fact that this method could seem difficult to you. You may be able to determine your tax liability and properly plan your tax payments by speaking with a tax expert. Please feel free to call us at 8970419669 if you need any help.
Stay up-to-date with the latest news and updates by following us on social media. Connect with us on Instagram today!- Instagram.