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Working in 2 companies-tax issues
Hello,
I am an IT professional.I was working full time since last 3 years in a company till Sept 14-08 until I resigned and joined another company on Sept 15-08.
I am still going to my old company and working there on weekends(weekends are off in my new company).The new company is asking for form 16.Since my old company was small we have hired a CA who takes care of the taxes and visits the company occasionally.The admin person at my old company(he is the contact point with CA) said to me "Ask the new company to deduct taxes taking into account the income from 15th Sept-08 till the end of financial year".
My earnings from old company till March31-2009 will be= approx 2Lacs
Earnings from new company will be = approx 1.95L
My question is:
Can I ask the new company accountant to deduct whatever taxes are applicable in this financial year from 15th sept 08(basically assuming that I have started working from 15th sept for this financial year this year) and give me form 16 at the end of the year so that my previous employer can combine his form 16 and new company's form 16 and sort out my taxes.So i will have two form16 in hand.I realise that I have to pay some balance tax as I am getting double tax relief this way.
Replies (1)
Dear Rahul, to make things simple try to do the following:
- Obtain a Form 16 from the new company stating the salary paid to you from the respective date of joining to the end of financial year and Tax deducted thereof on that amount.
- Note: You cannot quote your investments/Insurance/housing loan (if any) on both the form 16's.
- Report to any one of the employer if you have any other source of income.
- Your previous employer can issue Form 16 only for the period (ie. 1 April to 14 Sept 2008 you worked under him in the capacity of an 'employee'.
- Since you have resigned on the date mentioned above there is no 'employer - employee' relationship.
- You work for him during weekends in the capacity of a 'consultant' and not an 'employee'.
- The tax deducted for the above amount paid to you will be reflected in a statement of non salary TDS called 'Form 16 A'.
- To sum up, you will have three forms viz. Form 16 - two, form 16 A, @ year end.
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