As per the Income Tax Act, 1961, under Rule 26A, employees are required to furnish the Form 12B to new employers if they are beginning work at the organisation in the middle of the year. This form divulges information relating to the individual’s income drawn with previous employer. While furnishing Form 12B is not mandatory by law, several employers may demand it.
Filing Form 12B requires an individual to fill in the following details:
- Details of previous employer including Permanent Account Number (PAN) or Tax Deduction and Collection Account Number (TAN)
- A consolidated break-up of the total cost to company with previous employer
- Deductions for the Provident Fund
- Deductions made for provision of rent-free accommodation
- Deductions under any of the sections of the Income Tax Act
- TDS on salary by previous employer
- Professional tax paid by the employee, if any
Switching jobs is never easy, but may often be necessary. It is essential to have a job for many reasons, including of course, the assured flow of regular income. Additionally, services like loans may only be available to salaried individuals. Whether you are seeking a personal loan or even a home loan, lenders will judge your eligibility on the basis of whether you are currently employed. For instance, if you apply for personal loans on Finserv MARKETS, you avail up to Rs. 25 lakh in less than 24 hours, if you are a salaried individual.
However, while switching jobs, several things need to be considered by the employee. Read on to learn about some
Things That you Should Keep in Mind at the time of switching jobs
1. Declaring previous income accurately to new employer:
Employers deduct TDS on the basis of the salary paid to you. It is important to declare your previous income correctly to your new employer, otherwise you might face issues of tax payables. To do this, you can utilise the Form 12B which can be submitted to your new employer to keep track of the TDS that was previously being deducted, and let them make appropriate decisions on TDS to be deducted now.
2. Documents and details that need to be disclosed:
Along with providing salary information and TDS via Form 12B, it is necessary to intimate your new employer on several other details as well. Disclosing these details allow for timely tax payments. These details include information on your rent, including rent agreement and receipts since these will help you continue to claim HRA exemptions. You must also submit details on interest paid on home loan and details of income earned through house property. It is also important to declare to your new employer details of all Section 80 deductions.
3. Declare Loans:
Loans may or may not form a considerable part of your net assets and liabilities. However, it is necessary to declare the amount you have availed as loans to your new employer. If your existing loan rates are too high, immediately head to Finserv MARKETS and apply for personal loans. With loan amounts up to Rs. 25 lakhs available with only submission of minimal documentation, you can avail yourself the best personal loans in the market and save yourself from high interest rates. Personal loans available on Finserv MARKETS can be yours with interest rates starting from 12.99%.
4. Two Form 16s:
According to the Income Tax Act, it is essential for an employer to provide a Form16 if they are deducting TDS on your salary. Make sure to collect Form16 from your previous employer since these will prove useful while filing returns. You will be required to submit two Form 16s, one from your current employer and one from the previous.
Several confusions can arise at the time of switching jobs, and even while submitting Form 12B. For instance, many people get confused between the two forms issued under Rule 26A, namely Form 12B and Form 12BA.
Read on to learn more about Form 12BA and how it differs from Form 12B.
|Form 12B||Form 12BA|
|While Form 12B is submitted by the employee||Form 12BA is issued by the employer along with the Form16 to the employee|
|The Form 12BA includes a statement of perquisites or perks available to the employee, which can be either monetary or non-monetary.||Form 12BA is not mandatory, and need only be issued when the salary drawn by the employee exceeds Rs. 1,50,000.|
While changing jobs and the like can require tons of documentation, as indicated above, applying for personal loan on Finserv MARKETS hardly requires any. In just a few simple steps, you can easily apply for a personal loan and have your loan approved within 3 minutes. The flexible repayment tenure allows you to repay the loan, between 12 to 60 months. Also read how you can avail a tax benefit on personal loan only at Finserv MARKETS
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