Did you switch jobs during FY 2025-26 or work for two employers in the same financial year? If yes, filing your Income Tax Return (ITR) for AY 2026-27 may require extra attention because both salaries together form the total taxable salary.
Many salaried taxpayers consider that reporting salary income is a simple process when filing an ITR; however, there may be instances where the salaried taxpayer missed reporting income from one employer, TDS was computed incorrectly, or tax deductions were claimed twice. These types of mistakes can result in tax notices and may also cause a delay in processing income tax refunds.
So, if you’ve received a salary from two employers during the year, here’s everything you need to know to avoid costly errors and file your ITR accurately for AY 2026-27.
Worked for two employers? Avoid this ITR mistake
If an employee has worked for two employers during the same financial year, salary income from both employers must be combined and reported in the ITR.
The key rule is that deductions and exemptions should be claimed only once in the year, not separately with each employer, because both salaries together form the total taxable salary, says Pranav Sai S, Tax Expert at ClearTax.
Employees should also check whether the TDS deducted by the first employer was considered by the second employer, as this often causes shortfalls. Proper disclosure of both Form 16s helps avoid mismatch, underreporting, and tax notices.
Salaried taxpayers can use ITR-1 (Sahaj) if their total income does not exceed Rs 50 lakh and they earn income only from salary, one house property and other sources such as bank interest. However, if the taxpayer has capital gains, foreign assets or income, multiple house properties, or a total income exceeding Rs 50 lakh, ITR-2 can be used.
Documents required
If you worked for two employers in one financial year, before filing your ITR for AY 2026-27, keep the following documents ready:
Form 16 from both employers
Salary slips from both employers, if required for reconciliation
Form 26AS to verify TDS details
Annual Information Statement (AIS)
Taxpayer Information Summary (TIS)
Bank account details
Investment proof documents for deductions claimed, if any.
HRA documents
Home loan interest certificate, if claiming a deduction on a housing loan
Interest certificates
Proof of additional income, such as fixed deposit interest, savings account interest, dividends, or capital gains
Self-assessment tax challan
How should employees reconcile salary figures in Form 16, AIS, and Form 26AS?
Employees should first match the gross salary, taxable salary, and TDS shown in both Form 16s with the entries in AIS and Form 26AS.
Form 16 gives employer-wise salary and deduction details, while AIS and 26AS reflect reported tax credits and salary-related information.
If any employer has missed reporting or reported a different amount, the employee should resolve it before filing the return. The final ITR should reflect the correct combined salary, even if one of the statements contains a mismatch.
Why do job switchers receive tax demand notices despite TDS from both employers?
This usually happens because each employer calculates TDS only on the salary paid by that employer, not on the employee’s total annual salary from both jobs.
“As a result, the second employer may not fully account for salary already earned from the first employer, which can lead to under-deduction of tax. Another common reason is that deductions such as 80C or HRA may be claimed twice or inconsistently,” said Pranav Sai S.
The tax department flags the difference when the total salary reported in the ITR does not fully match the combined records.
Employees can submit Form 12B to the new employer and disclose the salary, perquisites, and Tax Deducted at Source (TDS) from the previous job, so TDS is computed on the combined salary.
How should deductions and exemptions be claimed when income is earned from two employers?
Deductions and exemptions should be claimed only once for the full year, not separately with each employer.
For example, Section 80C investments, 80D health insurance, HRA, and standard deduction should be considered at the total annual level while preparing the final return.
“If an employee has already submitted proof to one employer, they should ensure the second employer does not duplicate the claim unless the total annual limit still allows it,” stated Pranav Sai S.
The safest approach is to aggregate both salaries first and then compute deductions once.
What red flags does the Income Tax Department typically identify in such cases?
Common red flags include salary figures in the ITR that are lower than the combined Form 16s, TDS credits that do not match Form 26AS, duplicate deduction claims, and unexplained changes in taxable salary after a job switch.
The department may also notice if one employer’s salary is not reflected properly in AIS or if the employee has claimed the standard deduction or HRA in a way that appears inconsistent.
Large mismatches between salary slips, Form 16, and the final return often attract scrutiny.
What steps can employees take before filing ITR to ensure no salary income is omitted?
Employees should collect both Form 16s, salary slips, payslips for the transition period, Form 26AS, and AIS before filing.
They should then calculate the total salary for the year by combining income from both employers and verify that all TDS credits are captured.
If one employer’s records were not fully reflected, the employee should make the correction in the ITR rather than assuming the return is already correct.
This pre-filing reconciliation is the best way to avoid notices, refund delays, or tax demands later.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.
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