Changed Jobs? How to Deal with Multiple Form 16s

Changing jobs is very common among individuals. People tend to change jobs for a better pay scale or to acquire new skills, and when you do this within a financial year (FY), you will have more than one Form 16. This may lead to confusion about whether your income taxes are in order or not.

Here are the solutions to the queries arising if you changed jobs during the year:

What is Form 16?

Form 16 is a TDS certificate issued by the employer to the employee showing the total amount of salary paid to the employee and the amount of tax deducted on the total salary by the employer. Form 16 is issued by 15th June after the end of the financial year (year ending on 31st March, 2025). The last date of filing ITR is 31st July of the year succeeding the financial year (AY 2025-26).

Salaried individuals who change jobs during a financial year will be issued multiple Form 16 from every employer. 

Reasons for Struggle in Filing ITR with Multiple Form 16

Individuals face a struggle in filing ITR with Multiple Form 16 because of the complex calculations involved in calculating the total taxable income. Some entries of exemptions and deductions may have been duplicated or missed when producing Form 16 by multiple employers. An individual's tax liability may increase when filing the ITR. Based on the chosen tax regime, every employer considers certain exemptions and deductions. Therefore, some exemptions or deductions may have been used in calculations twice. There can also be an increase in tax liability and penal interest because of the significant difference in the payment of advance tax.

Steps to be Followed to File ITR with Multiple Form 16

When filing ITR with multiple Form 16, you should follow the below steps to calculate the accurate tax liability for the financial year:

Inform your Current Employer about your Previous Employment

Several individuals do not inform their new employer about their previous salary structure. As a result, the new employer calculates income tax based on the income earned in the FY, which leads to a miscalculation of taxes for the financial year.

For instance, Mr Raj left ABC company in December 2024 and joined a new company, XYZ, in January 2025. He has not been informed about his previous salary to XYZ. He earned Rs 6.5 lakh from his previous employment and Rs 2.5 lakh from XYZ. Now that he has not informed XYZ about Rs 6.5 lakh, they will only calculate his tax based on Rs 2.5 lakh. According to XYZ, Mr Raj will not pay tax during the same year as his income is below the basic exemption limit of Rs 2.5 lakh. But, he will have to pay taxes on Rs 9 lakh (Rs 6.5 + Rs 2.5 lakh) along with a penalty while filing his income tax returns. To avoid this miscalculation of taxes, you should declare your previous salary to your new employer as soon as you join the company.

Include Details of all Employers in your Tax Return

Ensure you receive your Form 16 from all the employers you have worked with in the particular FYs. Form 16 is the most vital document to file your income tax returns. Details such as PAN of the employer, TAN of the employer, name and address must be reported for each employer in your tax return. Cleartax allows you to upload multiple Form 16s and file your tax returns accurately.

Consolidate Salary from All Employers

You should consolidate the salary earned from all the employers while filing your tax returns. If you skip reporting any such salary, the department might send you a notice about the non-reporting of income. Remember, your salary is always taxable irrespective of whether TDS is deducted or not, so include this amount in your return.

You should calculate the total gross salary without considering any exemptions or deductions. To calculate the total gross salary for the financial year, you should add the following heads of salary from  Part B of all the Form 16. Part A of Form 16 contain the information about the TDS deducted by the employer. The calculation for salary is done as follows:

• Salary as per provisions contained under Section 17 (1)
• Value of perquisites under Section 17 (2)
• Profits in lieu of salary under Section 17 (3)

Check your Form 26AS

Form 26AS is the tax credit statement which consists of details of TDS by various deductors. A salaried individual can get the details of his salary credited every month and tax deducted thereon from each employer in Form 26AS. This form is very important for filing your income tax returns as you can take the credit of all the tax deducted against your total tax dues in a financial year. One must always cross-check the TDS entries appearing in Form 26AS with his payslips or bank statements. In case of any mismatch in the entries, he must report the same to his employer and resolve it before filing the tax returns.

Adjusting Exempt Allowances

Usually, with every job change, the salary structure changes. This also leads to changes in your allowances, such as house rent allowance (HRA). Remember to claim HRA exemption from all your employers. You just have to submit the rent receipts if you live in a rented apartment. If you have missed submitting rent receipts to your employers on time, you can claim HRA while filing your income tax returns. In such a case, you must recalculate your HRA exemption for the entire year, adjust your salary accordingly and get a refund if excess tax was deducted.

Claim all the Tax Deductions

Employers usually begin collecting proof of tax-saving deductions around February or March every year. Many individuals quit their jobs before this period, and employers fail to provide them with the benefit of various deductions. Don’t worry. Once you have consolidated your income earned during the financial year from multiple employers, you will have to sum up your deductions, in case you have invested in tax-saving avenues. 

When filing your income tax returns, you can only claim deductions under sections 80C to 80U under the old tax regime. However, under the new tax regime you can avail of fewer deductions. For future reference, safely keep the proofs and remember that deductions can be allowed against your total income earned in a FY, so the benefit of deductions for tax calculation must be taken only once a year. 

Calculation of Total Tax Liability

When your salary income from different employers is aggregated, there are chances that you might see a tax due. Why does this happen? If your new employer does not know how much you earned from your previous job, his tax computation may be inaccurate. Generally, the basic exemption limit and standard deduction may be allowed by all your employers. The benefit of tax-saving deductions might be allowed by more than one employer while calculating tax. Also, it may happen that after summing up all your salary income, your income tax slab may have gone up.

You should calculate the total tax liability from the net taxable income by applying the income tax as per the slab rates, surcharge if applicable and health and education cess. 

Also, if you fail to pay the advance tax, a penal interest will also be added to your total tax liability. If there is a significant difference between the advance tax paid and the total tax liability, there will be penal interest. So, the total tax liability will be computed by adding the penal interest.

Calculation of Net Tax Liability

You should calculate the net tax liability by deducting all the TDS, TCS and the advance tax payment. If the Figure arrived by deducting TDS, TCS and advance tax payment, if any, is negative, you are eligible for a tax refund. If this figure arrived is positive, you will be required to pay the tax at the amount of the arrived figure.
 

What To Do In Case The Previous Employer Did Not Issue You A Form 16 ?

• Break up the salary and deduct tax from the payslips of the old employer.
• Then, add up the total income and subtract the exemptions such as rent, travel allowance, etc.
• If you have invested under sections 80C to 80U, make deductions for them.
• Cross verify the salary information with the Form 26AS or Annual Information Statement.
• Last but not least, find out the tax liability and subtract the TDS.
• If there is any remaining tax, you must pay it.

For instance, Mr Kumar left Z company in December 2024 and joined a new company Y, in January 2025. He has not informed his previous salary to Y. He earned Rs 9.5 lakh from his previous employment (Z Company) and Rs 2.4 lakh from Y. According to his previous salary, his salary was under the tax slab of 20%. After summing up the salaries from both employers, the tax slab has been moved to 30%. This situation will lead to a tax due for Mr Kumar while filing his return.

So, it’s prudent to recheck all the salary details from different employers and pay the tax due before submitting income tax returns.

Conclusion

In summary, you should be aware that dealing with multiple Form 16s requires a lot of attention. By providing all the necessary details, you can ensure proper tax filing and compliance.