A person was working in company ABC and resigned from it. He withdrew all his dues, including gratuity, outstanding leave,etc. in December 2011. The form 16(Salary Certificate) clearly mentions that tax has been deducted at source.
In January,2012, this person joined another company XYZ for about two months. Naturally, the salary earned by him in these two months will be below taxable limit and hence no tax has been deducted at source.
This person has been advised that since the tax only on Salary Certificate of company ABC will find mention in the Income Tax Department records(26AS), he can ignore the Salary Certificate of company XYZ.
Furthermore, he has been advised that he may file IT Returns only on the basis of the Salary Certificate of company ABC.
The combined income of the two salary certificates(ABC plus XYZ)is attracting additional tax which he has been advised to ignore.
What are the repercussions of such an action and what is your advice? Can any problem come up in the future?
CAclubindia
