TDS Computation When an Employee Works for 2 Companies (Employers) in a Financial Year

There are 2 types of scenarios in which an individual may be working for more than one employers in a financial year. they are as follows:

• When he changes his job
• When he is working for two employers simultaneously

In each case he has to furnish form 12B to one of the employers chosen by him. Form 12B contains the following information:

• Detail of the previous employers like its name, PAN number, TAN number
• The breakup of his salary
• Deductions related to Provident fund and details of rent free accommodation, if any
• Deductions under various sections like 80C, 80D, 80E, 80G and 24
• TDS on salary deducted by the employer
• Professional tax paid by the employer

It may be noted that Form 12B needs to be furnished irrespective of the fact whether TDS was deducted or not. Though it is not mandatory to submit Form 12B to the other employer, it is advised that the same may be done so that it becomes the liability of the second (new or simultaneous) employer to compute and deduct TDS at the average rate decided after consideration of details provided in Form 12B.

 

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