ITR Tax shocker
Last year I made a switch and earlier package was not in taxable range (8LPA). This was for almost 70% of the year. After switching, the new company deducted TDS every month for the rest 30% of the year.
Now when I’m filing ITR I see some extra tax amount that needs to be paid on top and also some interest that they have applied.
Questions -
- Am I missing something and paying extra that could’ve been somehow saved?
- From this year onwards TDS has increased since April, if there’s no other income, will I have to pay additional tax again while filing ITR next year or this is all that’s going to be deducted?
- Need tips on tax related experiences since I’m not a lot aware, for future.
I don’t do ppf investments etc so I think new regime is my default. Thanks!
Why nobody is talking about the tax that needs to be paid on saving account interest/fd interest, stock market if any
Because capital gains and other things are not much for me. Mostly all of it is related to income so ignoring rest of the things.
It's interest on interest, can't really do anything by talking about it 😂
Apr to Mar is the Income tax cycle, when did you make the switch? Did you declare your income and tax deducted for the months you were part of prev org? Whats the new ctc? Whatever it is, if you didn't declare prev sal then in new regime tax is not applicable till 12 lakhs
I didn’t declare anything to new company, wasn’t aware.
Yes, you are missing a lot. (1) When you file ITR, Govt looks at your overall income across 12 months of FY. (2) You are having to pay more tax, on top of what already paid, because your current organisation never took into account your past organisation’s income. They assumed zero earning from previous organisation and did tax calculation only on your current organisation’s earning. (3) Some organisations ask for previous organisation’s income (the FnF Docs etc), and take that into account while calculating tax, but many others don’t ask for previous organisation’s full and final income settlement docs. In my opinion, the prior one is better, even though many employees too may prefer the later. (4) If you lowkey your income, don’t show it to Govt or to organisation, and it gets shown at the year end while filing ITR, it has multiple ramifications:- (i) You need to pay extra tax (ii) You need to pay 4 different types of penalties, and those are very high, like 1%/month penalty charges. (5) Certain portion of Taxes are enforced to be paid quarter wise, and entire tax must get paid by FY end (by March end). For ex, by June 15, you should have paid 15% of your total tax, by Sept 15, you should have paid 45% of your total tax and so on…, otherwise at the time of filing ITR, you need to pay 1% fine for every month, on the balance amount. This is what might be happening in your case, you are demanded by Govt to pay the fine. They just sugarcoat it as interest/fee. (Read about section 234 A, B, C, D)
(6) Talking of this year onwards for you, if you have chosen New Tax regime, and if you don’t have additional fat earnings from FD, Intraday trading, Business etc, then you don’t need to worry, because your organisation’s automatic tax deduction should work fine. But if any other situation (like Old Tax regime, with lots of tax saving declarations in place, then you need to understand the tax calculations and how these things work, or just hire a CA).
(4) (ii) You “may” need….
If you declared in new org - Old ctc plus new within the cycle if it's less than 12lpa, thr will be no tax Else, new org should only consider for the months between your Doj and Mar
