As the Income Tax Return (ITR) filing deadline approaches, many salaried individuals are preparing to report their income for the financial year. However, if you changed jobs during the year and worked for more than one employer, you need to be especially careful to avoid a common tax filing mistake — failing to report income from all employers.
Why This Mistake Happens
When an employee switches jobs, each employer provides a Form 16, which includes salary paid and tax deducted at source (TDS) for the period of employment. Many taxpayers make the error of submitting ITR based on just the latest employer’s Form 16, assuming that the previous employer’s income and taxes are irrelevant or already covered.
In reality, both sets of income must be consolidated while filing your return. The Income Tax Department considers total annual income from all sources, and leaving out income from the first employer can lead to underreporting.
Consequences of Underreporting Income
Underreporting of income is considered a serious compliance issue under Indian tax laws. If the Income Tax Department detects discrepancies between your ITR and data reported through your PAN by employers, it can lead to:
- Tax demand notices
- Interest on unpaid tax
- Penalties for inaccurate filing
- Legal scrutiny under misreporting or concealment provisions
In many cases, taxpayers end up receiving a notice under Section 143(1) or even a more detailed scrutiny under Section 139(9).
How to File ITR Correctly If You Had Multiple Employers
Collect All Form 16s
Ensure you have Form 16 from each employer for the financial year. These documents show the salary paid and TDS deducted during your tenure.
- Use Form 26AS and AIS for Cross-Verification
Form 26AS and the Annual Information Statement (AIS) available on the Income Tax portal show all income credited and tax deducted under your PAN. Verify that all amounts match with your employer records. - Add Both Incomes
Calculate the total income by adding the salary earned from all employers. Adjust deductions such as Section 80C, 80D, and HRA only once, based on actuals. - Recompute Tax Liability
Recalculate your total tax liability based on consolidated income and apply any advance tax or TDS already paid. If tax is due, pay self-assessment tax before filing. - Choose the Right ITR Form
For most salaried individuals, ITR-1 is applicable. However, if you have income from other sources or capital gains, ITR-2 may be more suitable.
Final Advice
Switching jobs within a financial year is common, but it brings added responsibility during tax filing. Ignoring salary from one employer might seem minor, but it can create bigger problems in the future. Filing a complete and accurate ITR not only keeps you compliant but also ensures smooth processing of refunds, if applicable.
Take the time to review your income records thoroughly and consult a tax professional if needed. Proper filing helps avoid unnecessary stress and ensures you remain on the right side of tax laws.
