How to file Income tax return with multiple Form 16?

How to file Income tax returns with multiple Form 16: Form 16 is issued annually by each employer and is an essential document for submitting income tax returns (ITR). Employees may have also changed positions during the fiscal year, resulting in them having multiple Form 16s during the fiscal year. Because all employers will issue Form 16s, this is the case.

How to file Income tax return with multiple Form 16?

31 July 2023 is the due date for submitting your income tax return (ITR) for financial year 2022-23 (assessment year 2023-24). Even though the deadline may seem somewhat distant, taxpayers should begin the process as soon as they receive their Form 16s.

Form 16 is one of the most vital requirements for taxpayers filing an ITR. This form has two sections, Part-A and Part-B. Part-A includes all information regarding the tax withheld by the deductor—the employee—during the year. In addition, it includes the employee’s PAN and the employer’s PAN and TAN.

Part B, on the other hand, is an attachment to Part A. It contains information about the employee’s salary breakdown, exempt allowances under Section 10, and the various deductions available under the Act.

What should be done if taxpayers have multiple Form 16s?

All sources of income should be considered when calculating the taxable income. Therefore, if an employee has more than one Form 16, they must combine all their incomes and then calculate their tax liability using the applicable slab rate.

Canadians should anticipate for another interest rate hike: Whether by this week or next month

Compute income under the heading of salaries and deductions for all Form 16s.

From all Form 16s, taxpayers can first determine their total salary and profits in lieu of salary. This is referred to as “Gross Salary.” The total exempt allowance and perquisites, such as house rent allowance, conveyance allowance, transportation allowance, leave travel allowance, etc., can then be computed from all Form 16s.

Following this, they should deduct the total exempt allowance and perquisites from “Gross Salary” They will arrive at “Net Salary” after deducting all applicable deductions.

Likewise, they are able to calculate deductions from all Form 16s.

Calculating the tax obligation based on multiple Form 16s

Taxpayers should compute their gross total income (income under the head salaries as computed above, income under the head dwelling property, income under the head capital gains, and income under the head other sources) and then consolidate all Form 16 deductions.

In addition, they can compute taxable income using the formula: taxable income = gross total income minus deductions. The tax liability on the taxable income can then be calculated using the applicable slab rate. To calculate the net tax liability, deduct the tax withheld by all employers from the computed tax liability and any employee advance tax payments.