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Are You Changing jobs? Make Sure You Furnish tax statement

In case you are changing jobs, you stand a chance to get tax benefits from both employers, leading to extra liability at the time of filing returns.

The article talks about advance tax. Individuals, who change jobs do not realise that the TDS deducted from their salary is less compared to what it should have been. They become aware of it while computation of taxes at the time of filing returns. Actually, the difference in the amount (actual payable minus taxes paid as TDS) is payable before filing the returns.

The article suggests that taxpayers, whose annual tax liability is more than Rs. 10,000 should opt for advance tax. Those who fail to pay advance tax on time are liable to an interest penalty u/s 234C and 234B. Default in advance tax payment is subject to one per cent a month interest.

According to Vaibhav Sankla, director at tax consultancy firm H&R Block, the best option is to provide the new employer with the Tax Computation Statement from the previous employer. The reason is employers can’t furnish Form 16 in the middle of the year, hence, they give Tax Computation Statement. It shows computation till the day the employee worked with them. Providing tax computation statement is better option than taking the advance tax route. If one changes jobs in the month of December or January then they would have missed two advance tax instalments. Hence, he/she will be required to pay a penalty.

Source : Business Standard