If you have worked in two companies in a financial year, then you are issued 2 Form-16. Many people know this today, but very few people know that in such situations, you often become liable for advance tax. Due to not paying the advance tax on time, you also have to pay penalty and interest. People often come to know about this when they file ITR, because no communication is made by the Income Tax Department about it in the middle of the year.
More Form-16s can also be issued
If you have changed jobs 3 times in a single year, then you will be issued one Form-16 each from all the three companies. That is, you will have 3 Form-16s. That is, the more jobs you change in a financial year, the more Form-16s you will be issued.
What is Form-16?
Form-16 shows how much tax has been imposed on you and which deductions you have got the benefit of. It contains information about the salary you received, the tax imposed on it, the source of your income and all kinds of deductions.
Form-16 has two parts
Form-16 has two parts. One of these is Part A (Form 16 Part A) and the other is Part B (Form 16 Part B). Part A contains the company’s TAN, company’s PAN, employee’s PAN, address, assessment year, period of employment. Apart from this, details of TDS deposited to the government are also given in it.
Part-B is very important
If we talk about Part B of Form-16, then it contains information about tax including salary breakup. It tells what is your gross salary, what is your net salary, how much house rent allowance you have received, how much money has gone into your PF account. Also, you get to know how much professional tax has been levied on your salary and what deductions you have got under different sections. It also contains information about your investments, what you have invested in medical, how much money you have invested in saving plan and what other tax exemptions you have got.
If you have changed your job, keep checking the liability
If you have worked in two companies in a financial year, then you will also be issued two Form-16. On the other hand, if your salary is high, then you will also have a liability of advance tax. In such a situation, it is important that you check at the beginning of the year according to your salary whether you have a liability of advance tax or not. If you have a liability, then pay it on time, otherwise you will have to pay both penalty and interest.
What is advance tax?
Advance tax is a kind of income tax, which has to be deposited with the Income Tax Department before the end of the financial year. It is not paid in lump sum on an annual basis like normal tax, but is deposited in installments. Under this, taxpayers deposit the tax in advance with the Income Tax Department.
Who has to pay advance tax?
Advance tax has to be paid by those people whose tax liability is more than Rs 10,000. It applies to employed people, freelancers, businessmen and people earning money in any other way. However, if you are above 60 years of age, those who do not do any kind of business are exempted from advance tax.
When is advance tax to be paid?
Advance tax is not to be paid in lump sum once a year like normal tax, but has to be paid in installments. It has to be paid on a quarterly basis. Its date is decided by the Income Tax Department. For the financial year 2022-23 and 2023-24, these dates are 15 June, 15 September, 15 December and 15 March.
How much advance tax is to be paid?
Even though advance tax is paid in installments, it is calculated for the whole year. You have to calculate in advance how much tax can be levied on you in a year. You can calculate tax on the remaining income according to your tax slab by removing deductions from your income. After this, you have to pay at least 15 percent of your advance tax on 15 June. At the same time, 45 percent of the advance tax has to be paid by 15 September, 75 percent of the advance tax by 15 December and 100 percent of the advance tax by 15 March.
What will happen if advance tax is not paid?
In the case of employed people, in case of changing jobs, companies often fail to deduct TDS properly and advance tax liability arises. In such a case, you will have to check and deposit the advance tax, otherwise a charge will be levied on you and you will also have to pay interest.
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