People often change their jobs due to various reasons like professional growth, better salary, or any other personal reasons. It’s not the same as before when our parents used to work with one employer throughout their career till their day of retirement. I remember one of my friends who was working with an MNC and after spending a few years with the company, he got a better offer and switched to another company, in October, in the middle of the Financial Year.
While he was completing his formalities with HR, he noticed that Form 12b needed to be submitted that had the Income details of his previous employer. This guide will help you to know more about Form 12b and the details to furnish to complete the procedure.
A salaried individual, who joins a new Company in the middle of the Financial Year, is required to submit Form 12b that has the income details of his previous employer.
Due to the change in jobs the situation arises, where the individual may get tax exemption benefits twice i.e., from his previous employer along with the current employer. The employee/individual must ensure that the tax exemptions and deductions are considered only once for that relevant Financial Year.
Form 12b needs to be submitted to the new/current Employer. It can be filled based on Form 16 and Salary Slips issued by the Previous Employer. Below are the details that need to be furnished while submitting form 12b along with the previous Employer details, TAN number / PAN Number
For example- If an individual has joined the new company in August 2017 then he/she is supposed to give the details on the income earned from 1st April 2017 till 31st July 2017.
After submission of Form 12b with all the required details, the employer issues a consolidated Form 16 to the Employee at the end of Financial Year when submitting his/her IT Return.
It is recommended to submit Form 12b even when the salary is non-taxable while working with previous employer. There could be a possibility that the individual might fall in the tax bracket when the past and present salary is considered by the current employer.
It is always recommended to verify the TDS and Income details of both the Form 16’s issued by the past and present employers. The amount of TDS in the previous Form 16 must be same with that of the Consolidated Form 16 issued by the current Employer. And if the details are not declared to the current Employer through Form 12B, then the calculation should be made manually when submitting Income Tax Return.
To ensure you file your tax return error-free, enlist the aid of the experts at H&R Block India.