Tax payment?

Question

I was working with a company (In India) since Nov-2004, In the month of March-2008. I joined a new company. Here I got a Form 16 for the month of MARCH. Till Feb I got FORM-16 from the previous company. Now the previous companies FORM-16 has Rs.800 as returns. For the new company no TAX has been deducted , as my salary was below the tax bracket for one month. When I went file the returns I got a surprise stating I need to paye TAX of Rs.8000. How could it be possible. Pls help me. Can some one explain.

Answer 1

This is very much possible.

Think of this - in the new firm you were not taxable since the amount earned is below the minimum taxable limit. But look at the wholistic picture, this 1 months pay actually was added to your total pay for the whole year which means that you were actually very much in the taxable limit which is where this final months income comes in. Try this - us ea tax calculator for the last FY and fill in all details of income and expense and you will see the same result (i.e. about 7200 tax to be paid).

Answer 2

Take help of a tax preparer to do your tax return. You should not owe Rs. 8,000 as tax as it is the responsibility of your employers to withhold TDS so that you do not owe any tax.

Forum on India Taxes http://www.mytaxes.in