Switched jobs in FY23? Submit form 12B to your new employer by March 31 to save more

If you have switched jobs during the current financial year (ie, between April 1, 2022, and March 31, 2023) and have not yet submitted Form 12B to your new employer, it is advisable to do so before the end of the financial year. This will help your new employer calculate your total taxable income for the year and deduct the correct amount of tax accordingly, CA Ruchika Bhagat, MD at Neeraj Bhagat and Co. told CNBC-TV18.com.

Simply put, form 12B is a statement of income earned by an employee from a previous employer during a financial year. It is typically required to be submitted to the new employer when an employee switches jobs mid way in a given financial year.

"You can furnish the said form to your new employer along with details such as the address of the employer(s), TAN of the employer(s), Permanent Account Number or Aadhaar Number of the employer(s), period of employment, total amount of salaries, allowances such as house rent allowance, conveyance allowance etc, value of perquisites, section 80C deductions along with the total amount of TDS," Yeeshu Sehgal, Head of Tax Market at AKM Global told CNBC-TV18.com.

Submitting form 12B before the end of the financial year can help avoid last-minute tax burden and ensure that all formalities are completed in a timely manner.

Industry experts suggest that it is always a good idea to stay on top of tax-related paperwork to avoid penalties or other issues down the line.

While new employers can't force you to submit form 12B, it is always advisable to do the same to reduce the tax burden and start with proper tax planning.

Furnishing form 12B before the end of the financial year helps the new employer deduct the exact amount of taxes and the new employer would be able to issue the correct form 16 to the taxpayer.

Once you submit form 12b with the correct details required, the new employer will furnish a consolidated form 16 at the end of the year based on the details provided by the new employee in form 12B.

As we know, form 16 is one of the most important documents required by taxpayers to file an ITR and you require form 16 form all your employees if switched job in any financial year. Having more than one form 16 can lead to confusion regarding calculating total taxable income and total tax exemptions.