Changed jobs recently? Here's how to file ITR without any errors

Business Standard

07-07-2025

If you switched jobs during the last financial year, filing your income tax return (ITR) could be a bit tricky. With multiple Form 16s, possible TDS mismatches, and lump-sum payments like gratuity or PF withdrawals in the mix, even a minor slip-up can invite a notice from the tax department. Experts break down the common pitfalls and share tips to help you file your return smoothly.
Don't miss income from previous employer
'One of the biggest mistakes taxpayers make is reporting income from only their latest employer and forgetting the salary earned from the previous one,' says Niyati Shah, chartered accountant and vertical head, personal tax at 1 Finance.
'This leads to underreporting of income and can trigger a notice from the tax department.'
Deepesh Chheda, partner at Dhruva Advisors, points out that employees also often fail to inform their new employer about income from the earlier job using Form 12B.
'As a result, the new employer calculates tax only on the current salary, which often leads to insufficient TDS and a higher tax liability at filing time,' he says.
Consolidate multiple form 16s
To file your return correctly, start by collecting Form 16 from each employer you worked for during the financial year.
Add up salary details from Part B of all Form 16s (gross salary, deductions, exemptions).
Cross-check TDS details in Part A against your Form 26AS and Annual Information Statement (AIS).
'Use Form 26AS as the backbone for reconciliation. Filing your ITR based on consolidated income ensures transparency and helps you avoid tax notices later,' Chheda advises.
Kinjal Bhuta, CA and secretary of the Bombay Chartered Accountants' Society, adds, 'When claiming deductions like 80C (investments) or 80D (health premiums), make sure you don't double-count them. These limits apply to your total income, not to each job separately.'
Handle TDS mismatches proactively
After a jobswitch, it's not unusual to see differences between TDS in Form 16 and what's reflected in Form 26AS or AIS.
'If there's a mismatch, reach out to the employer and request them to revise their TDS return (Form 24Q),' says Shah.
Sujit Sudhakar Bangar, founder of TaxBuddy.com, recommends that taxpayers always file their ITR as per the TDS credits in Form 26AS.
'If the employer doesn't rectify the error, you may need to pay the shortfall to avoid a tax demand later,' he warns.
Report lump-sum benefits correctly
Benefits like gratuity, PF withdrawals, and leave encashment during a job switch need careful reporting.
Gratuity: Tax-free up to ~20 lakh for eligible employees.
Leave encashment: Exempt up to ~25 lakh for non-government employees.
PF withdrawals: Tax-free only after 5 years of continuous service; otherwise, taxable.
'A common mistake is ignoring these receipts or reporting them incorrectly, which can invite scrutiny,' Bhuta cautions.
Checklist for job switchers filing ITR
-Collect Form 16 from all employers.
-Reconcile income and TDS with Form 26AS/AIS.
-Avoid double-claiming deductions like 80C, 80D, or HRA.
-Report gratuity, PF withdrawals, and leave encashment properly.
-File as per Form 26AS even if there's a mismatch with Form 16.
The Bottom Line
Switching jobs mid-year adds complexity to tax filing. But a little diligence now, consolidating Form 16s, checking Form 26AS, and correctly declaring lump-sum benefits can help you avoid unnecessary notices and penalties. 'A few extra steps today can save you major headaches tomorrow,' Shah says.