Is It Necessary to Collect Past Employer Salary Details for Payroll?

Hello friends,

I want to know what information about the previous employer's salary, taxation, PF, etc., needs to be captured from a new employee and how it is relevant from a payroll perspective. Is it really necessary to capture this information? Any help in this regard would be greatly appreciated.

I look forward to your response.

Thanks and regards,

Nitin

Hi Nitin,

The new employee should give his declaration of earnings in previous employment in Form 12B. In this case, the salary should be what he earned after deduction under Section 10. He should also declare PF, income tax, professional tax if any deducted by his previous employer in Form 12B.

Best Regards,
Pinak

Hi,

The details for past employment are obligatory to be furnished. In case the employee chooses not to disclose the same, any tax liability or non-compliance with the law is on his account. However, whenever he (or she) furnishes the details to the new employer, it is mandatory for the new employer to take the same into account while working out his tax and professional tax liability.

Please let me know if any further details are needed.

Thanks,
Pankaj Patodi

Hi Pinak/Pankaj,

Thanks for your help. If the employee gives the Form 12B with his past earning details when the employee files his/her returns:

1. Does the new employer have to show earnings received in previous employment in the Form 16 generated for the employee? If yes, under which head will it come? Is it going to become Profits in lieu of salary or will it get distributed under the relevant heads as if he/she earned it from the new employer?

2. Or does the employee use the Form 16 he/she receives from the previous employer and Form 16 given by us for the earnings he/she has received from us only while filing his/her IT returns?

3. Finally, does the new employer have to file Form 12B on behalf of the employee with the income tax department on receipt of the same?

Apologies if I sound naive... but I am naive in this regard. Kindly let me know how it works.

Thanks and regards,
Nitin

Hi,

To answer the second set of questions:

1. No, the same need not be shown in Form 16 from the new employer; however, the details can be shown as other income declared by the employee in Form 16.
2. The employee needs to use Form 16 from both the past and present employer for filing his personal income tax return.
3. The employer is not supposed to submit Form 12B to the IT authorities.

Thanks,
Pankaj Patodi

Hi Nitin,

As Pankaj has provided answers to your 2nd and 3rd questions, I will address your 1st question. The new employer should include your previous employment salary in Form 16 under the head "Any Other Income," based on the declaration you made to your new employer in Form 12B.

Regards,
Pinak

Hi Pankaj,

Do you have any documentation or support regarding whether previous employment information can be reported in Form 16? Please assist me with this as it would be very helpful.

Regards,
Rajan