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    Here's how to file ITR with multiple Form 16

    Here's how to file ITR with multiple Form 16

    Here's how to file ITR with multiple Form 16
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    By Anshul   IST (Updated)

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    Income tax return (ITR) filing: Having more than one Form 16 can lead to confusion regarding calculating total taxable income and total tax exemptions. Here’s how to tackle?

    If you have changed jobs during the financial year, you probably have more than one Form 16s. How should you file your income tax return (ITR) in such a scenario?
    As we know, Form 16 is one of the most important documents required by taxpayers to file an ITR. This form consists of two parts, Part-A and Part-B. Part-A consists of all the details of the tax deducted by the deductor—the employee during the year. Also, it consists of the details of the employee’s PAN and PAN and TAN of the employer.
    On the other hand, Part B is an annexure to Part A. It contains details regarding the salary breakup of the employee, allowances that are exempt under section 10, and the various deductions available under the Act.
    What should you do when you have this information from more than one employer?
    Well, as per the income tax rule, taxable income should be computed considering all sources of income. So, if you have more than one Form 16, you should consolidate all the incomes and, after that, compute the tax liability according to the applicable slab rate, said Kapil Rana, founder and chairman at HostBooks Limited.
    How to compute the income under the head salaries and deductions from all Form 16s?
    First, compute the total salary and profits in lieu of salary from all Form 16s. This is known as “Gross Salary”. Then compute the total of exempt allowance and perquisites, e.g. house rent allowance, conveyance allowance, transport allowance, leave travel allowance etc., from all Form 16s.
    After this, deduct the total of exempt allowance and perquisites from "Gross Salary" as computed. After deducting, you will arrive at “Net Salary”.
    Similarly, compute deductions from all Form 16s.
    And, how to compute the tax liability from multiple Form 16s?
    Compute gross total income (income under the head salaries as computed above, income under the head house property, income under the head capital gains, income under the head other sources) and then consolidate deductions from all Form 16s.
    Now, calculate taxable income with this formula = Gross Total Income (-) Deductions.
    After this, compute tax liability on taxable income according to the applicable slab rate. For calculating net tax liability, deduct the tax deducted by all the employers from tax liability as computed and advance tax, if any, paid by the employee.
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