Changed Jobs? Why Two Form 16s Can Leave You With a Tax Demand

You left one job in August 2025 and joined another in September. Each employer deducted almost no tax, and each Form 16 shows tax payable of nil. Add the two salaries together in your return for AY 2026-27 and the tax is over ₹1 lakh.

Nobody made a mistake. Each employer worked out TDS on the salary it paid, as though that was your whole income for the year. Each one gave you the full standard deduction, the lower slabs and the section 87A rebate. You only get those once. The gap is yours to pay, as self-assessment tax before you file, or later as a demand with more interest.

A worked example

Riya earned ₹6,00,000 from Employer A for April to August 2025 and ₹10,00,000 from Employer B for September 2025 to March 2026. She is in the new tax regime and has no other income. Slabs and the rebate below are the ones for FY 2025-26 (AY 2026-27).

What each employer computed

What the return computes

Three things went missing between the Form 16s and the return: the second ₹75,000 standard deduction, the second run through the zero and 5% slabs, and both rebates. Combined income above ₹12 lakh takes the rebate away entirely.

Interest on top

Because no advance tax was paid, interest applies under the 1961 Act's sections 234B and 234C. Both are 1% a month, worked on the shortfall rounded down to the nearest ₹100.

• Section 234B (advance tax short of 90% of the tax due): 1% a month from 1 April 2026 until you pay. If Riya pays self-assessment tax on 25 July 2026, that is four months: ₹1,13,100 × 1% × 4 = ₹4,524.
• Section 234C (instalments missed on 15 June, 15 September, 15 December and 15 March): 3% on 15% of the tax, 3% on 45%, 3% on 75% and 1% on 100%. That works out to ₹507 + ₹1,524 + ₹2,544 + ₹1,131 = ₹5,706.

So she pays about ₹1,23,330 with her return. The ITR utility calculates both interest figures for you; the point of the example is the order of magnitude.

The old regime has the same problem with smaller numbers. Each employer gives the ₹50,000 standard deduction, the slab below ₹2,50,000 and, where its share of salary is low, the ₹12,500 rebate for income up to ₹5 lakh. Section 80C claims can also be counted twice if you gave investment proofs to both employers.

How to file the return correctly

1. Collect both Form 16s. Each employer issues one for the months you worked there. Check that each Part A matches the TDS shown against that employer's TAN in Form 26AS or AIS.
2. Enter each employer separately in the salary schedule of ITR-1 or ITR-2, with its own gross salary, allowances and perquisites.
3. Claim the standard deduction once. The utility caps it, but check if you are filling figures in by hand or importing data.
4. Claim each deduction once. Under the old regime, an 80C or HRA claim that both employers allowed has to be split or limited to the real figures.
5. Pay the balance as self-assessment tax through e-Pay Tax, choose minor head 300 for AY 2026-27, and enter the challan in Schedule IT before you file.

If you file with only one employer's salary, or with two standard deductions, CPC can propose an adjustment. Salary shown in Form 16 or Form 26AS but missing from the return is one of the grounds the 1961 Act allows CPC to adjust during processing. You get a notice proposing the change first (how to answer it); if you do not respond, the 143(1) intimation adds the income and raises the demand with interest.

If the AIS salary figure for an employer differs from that employer's Form 16, the guide to AIS and Form 16 salary mismatches explains which to use.

Avoiding it in the current year

The cleaner fix is to tell the new employer about the old salary when you join, so TDS for the rest of the year is worked out on the combined figure.

• For FY 2025-26, the declaration is Form 12B, giving the previous employer's salary and TDS.
• For Tax Year 2026-27 (income from 1 April 2026), the Income-tax Rules, 2026 prescribe Form 122 under rule 204 for an employee to report salary from any other employer during the year, along with other income and TDS.

Each employer still issues its own certificate for the months you worked there. From Tax Year 2026-27 that certificate is Form 130; under rule 215(2), each employer issues Parts A and B for its period, and Part C can come from each employer or the last one, at your option. The guide to Form 130 covers the change from Form 16.

If you changed jobs after 1 April 2026 and did not give the new employer your earlier salary, you can still do so for the rest of the year, or pay advance tax yourself by the 15 December instalment.

myutils.me shows salary reported for each employer, year by year, from your AIS and TIS after you add your PAN or press Sync, alongside the tax deposits credited to you. It makes a second employer's salary, and the TDS against it, easy to see before you file.

FAQ

Both my Form 16s show zero tax. Can I really owe tax?

Yes. Each Form 16 is computed on that employer's salary alone. Your return adds both, and the slabs, standard deduction and rebate apply once to the total. In the example above, two nil Form 16s became a liability of ₹1,13,100.

I already filed with two standard deductions. What now?

If the return has not been processed, file a revised return for AY 2026-27 with the correct figures and pay the balance. If CPC has already proposed an adjustment, respond to it; if a demand has been raised, see how to respond to an outstanding demand.

Does the new employer have to account for my old salary?

Only if you tell it. Without Form 12B (Form 122 from Tax Year 2026-27), the new employer works out TDS on its own salary alone.

Which ITR form do I use with two employers?

The number of employers does not decide the form. ITR-1 allows salary from more than one employer if you meet its other conditions; otherwise use ITR-2.

Sources

• Tax slabs and 87A rebate for individuals, Income Tax e-Filing portal
• Income-tax Rules, 2026 (CBDT notification G.S.R. 198(E), 20 March 2026): rule 204 and Form No. 122; rule 215(2) on Form No. 130 from more than one employer
• Section 143, Income-tax Act, 1961 (incometaxindia.gov.in)
• Respond to Outstanding Demand FAQ, Income Tax e-Filing portal