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Have you switched Jobs? Then do file the right return

Switched jobs? You need to file correct ITR. Otherwise, you may end up making a cardinal error while declaring your investments or filing your tax returns.

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The article talks about the points you should keep in mind before filing your taxes. The points you should consider before filing ITR are duplicate investment declaration, non-submission of proofs for allowances, leave encashment, notice pay and withdrawing EPF.

Different companies follow different salary break-ups and income-tax calculation practices. Hence, it is important that you cross-check the numbers and re-evaluate your tax liability.

Submission of duplicate declarations with both the previous employer and the current employer will lead to duplication of deduction benefits as well. However, this will not have any effect on deductions such as HRA or LTA that are linked to your employment term. According to Vaibhav Sankla, Director, H&R Block India, the employee will thus have to pay the balance taxes along with the applicable interest u/s 234C and u/s 234B at the rate of 1% per month meant for delay and non-payment of advance taxes respectively.

The article asserts that most often employees forget the submission deadline for HRA, medical allowance and LTA proofs with the previous employer. You should remember that you

can claim tax benefit on HRA while filing ITR, but, you cannot carry forward LTA and medical allowance. These become taxable.

U/S 10(10AA), leave encashment received during retirement, or superannuation or otherwise is exempt from income tax.

Sankla points out that notice pay is a negative income and hence, should not be included in your taxable income.

EPF withdrawals are fully tax exempt only if the amount is withdrawn after five years of continuous service. The employer will deduct TDS at 10% for early withdrawal (i.e. before five years).

Source: Economic Times